Employee timekeeping: an essential process for your business

Keeping track of the hours your employees work is essential to running an efficient business. Effective employee timekeeping helps you better manage your workforce, pay your employees accurately and ensure your business is staying compliant with local labor laws. If you don’t track your team’s time and attendance effectively, it can lead to legal and financial problems for your business as well as decreased employee morale. In this article, we’re going to break down everything you need to know about employee timekeeping. We’ll cover:

• What employee timekeeping is
• Different ways to track time and attendance
• How to choose the best timekeeping method
• How to implement an effective timekeeping system

Let’s get into it.

What is Employee timekeeping?

Employee timekeeping is the process of tracking and recording the time worked by your employees. It's essentially a way for you to keep tabs on when your employees clock in, take breaks, and clock out for the day. There are many reasons why effective employee timekeeping is important for your business. Timekeeping keeps your payroll on track by making sure your employees are paid accurately for the hours they’ve worked and that overtime is calculated correctly. Employee timekeeping also helps you understand how your employees are using their time. By keeping track of when they clock in, clock out and take breaks, you can identify areas where their productivity can be improved.

Benefits of Tracking Time and Attendance

Not only is it crucial for you to track your team’s time, it also provides several benefits for your business. Here are the most notable benefits of effective employee timekeeping:

Fewer payroll errors

Under or overpaying your employees can lead to financial and legal woes for your business. By keeping track of your employees’ time and attendance, you’ll ensure that your employees are never paid inaccurately.

Better compliance with labor laws

The Fair Standards Labor Act (FLSA) requires that employers keep accurate records worked by nonexempt employees. Tracking your employees’ time and attendance effectively keeps you compliant with local labor laws, protecting your business from legal action and fines.

Improved productivity

By analyzing your timekeeping data, you can gain insights into how your employees are using their time and identify areas where productivity can be improved. Good timekeeping can also discourage tardiness, buddy punching and punching out early.

Higher employee morale

Accurately tracking time and attendance shows your employees that their time is valued and they are being paid fairly for their work. When employees are paid accurately and on time, it can reduce financial stress and anxiety for your team, which can lead to increased job satisfaction and higher morale.

Better decision making

Keeping track of your employees' time can make planning for the future a lot easier. By analyzing timesheets alongside staff productivity, you can figure out exactly how long it takes to complete certain tasks, or how much work can be done in a shift. And if you use a tool like the Homebase time clock for timekeeping, you'll even have access to labor cost reports and sales data from your POS system, which can help you make more informed financial decisions in the long run.

Different Methods of Timekeeping

You might be the type of business owner who prefers the simplicity of paper timesheets or punch clocks. Or maybe you prefer working with tech-based solutions like online timekeeping software or mobile apps. Here are a few different timekeeping methods, so you can decide which works best for your small business needs.

Online timekeeping software

An online timekeeping tool like Homebase can save you a significant amount of time on the labor-intensive process of making manual timesheets and punch cards.

Benefits of clocking in online

Manual timesheets can be simple to use, but can easily lead to errors, cases of buddy punching and incorrect paychecks. Here are a few ways web-based timekeeping software helps avoid these problems:

• Employees can clock in and out from their computers using a unique personal identification number (PIN). This makes sure that only they can sign in for their own shifts, keeping things secure and preventing unauthorized access.
• The timekeeping software records employee hours in real-time, immediately updating their time cards as soon as they clock in. Timekeeping software like Homebase helps avoid errors that can happen when manually entering data twice, saving you time and keeping things accurate.
• The system will alert you of any missing breaks or unusually long or short shifts before processing employee payroll. This gives you the chance to make any necessary corrections.
• You can easily export timesheet data to third-party software, or use the integrated payroll feature within Homebase to process payroll directly from the timesheets dashboard.

Mobile Time Tracking Apps

With a mobile timekeeping app, any employee’s mobile device can be converted into a clock-in kiosk. This allows them to enter a unique PIN to start and end their shifts directly from their phones. Plus, apps like Homebase come with GPS and geofencing features that prevent employees from clocking in before they arrive at work. For example, if you’re a restaurant owner with a large number of hourly employees who work varying schedules, you could benefit from using a mobile timekeeping app like Homebase. Timekeeping apps allow employees to clock in and out from their own devices, which is especially helpful if they arrive during peak hours and don’t have much time to access the nearest clock-in station.

The Homebase time clock app allows employees to clock in out using their smart device

Biometric timekeeping

Biometric timekeeping uses your employees’ biological data, like fingerprints, facial recognition, or iris scans, to verify their identity and track attendance. This type of timekeeping makes it very difficult for your employees to buddy punch or commit time theft. Biometric timekeeping provides more precise timekeeping data, which helps you save money by eliminating the possibility of time theft. But employees may feel uncomfortable sharing their biometric data, as it can be seen as an invasion of privacy. Not to mention, biometric timekeeping is restricted or illegal in several states. If this sensitive information is ever compromised, it could also put your employees’ personal security at risk. Certain employees with disabilities or unique facial and body characteristics may not be able to use biometric systems, which could impact the inclusivity and accessibility of your work environment.

Manual timekeeping

Manual timekeeping involves manually entering your employees’ clock in, clock out and break times with a pen and paper or spreadsheet. It can be a cost-effective option and allows for flexibility in making changes or corrections to timesheets. This approach is easy to train employees on and can foster a sense of trust between you and your employees. But manual systems can be inefficient when it comes to running payroll. You need to carefully review each employee's time card and cross-check it with their shift schedules, which can be time-consuming. Manual timekeeping systems don’t track breaks, personal time off (PTO), and overtime, which can create more headache for you down the road.

How to Choose the Best Timekeeping Method

Now that we’ve gone over the different timekeeping methods, here are some factors to consider when choosing the best one for your business:

Factor In Your Budget

Cost is always an important factor when making business decisions. Consider the budget for your business operations and figure out how much you’re willing to spend on a timekeeping system. Online timekeeping software and mobile apps like Homebase are relatively inexpensive compared to biometric timekeeping systems.

Consider the Size of Your Business

Think about the size of your business and the number of employees you have. Some timekeeping systems are better suited for small businesses with a handful of employees, while others work best for larger enterprises with hundreds of employees.

Think About What Features You Need

Different timekeeping systems come with varying features. Consider what features are important for your business. For instance, if you have hourly employees who work overtime, you might want a system that can automatically calculate overtime hours.

Consider The Method’s Ease of Use

Consider the ease of use of the system you choose. Will your employees find it easy to use? Will it require extensive training? Will it be easy for you to manage and process payroll?

Make Sure Your Method is Compliant

Ensure that the timekeeping system you choose complies with the local labor laws. This includes requirements for record keeping, breaks, and overtime calculation. A tool like Homebase offers live HR guidance so you never have to feel lost or confused about compliance issues. We’ll even notify you when laws change at the state or federal level, so you can be sure you’re always following regulations.

Homebase HR Pro offers resources and access to HR experts to help keep your business compliant

Labor laws typically regulate the number of hours an employee can work in a day or week, and require you to provide rest breaks and meal periods. Look into the maximum number of hours an employee can work in your state, as well as any requirements for breaks and meals.

How to implement an effective timekeeping system

Implementing a timekeeping system can be a daunting task, especially when you may not have the resources to invest in expensive software. Luckily, there are several ways you can streamline the process:

Choose a timekeeping system that fits your business needs

When it comes to choosing a timekeeping tool for your business, it's important to choose one that fits your needs and is easy for your employees to use. An easy-to-use timekeeping tool like Homebase can save you time and reduce timekeeping errors, which can ultimately save your business money. Relying on manual data entry can lead to costly errors for your business. A time tracking software like Homebase offers a solution by automating the process and producing accurate timesheets with calculated wages. And if you choose a robust platform like Homebase, it can even flag discrepancies in your staff's time cards, like missed breaks or inconsistent hours, giving you the opportunity to make any necessary changes before running payroll. This not only ensures your employees are paid correctly but also saves you time and money in the long run.

Communicate the importance of accurate timekeeping with your team

Let your employees know that accurate timekeeping is essential for your business to function effectively and efficiently. Time theft and inaccurate timekeeping can lead to overpayment, underpayment, and costly legal issues. Set clear expectations for your employees regarding timekeeping. This includes when they should clock in and out, how to report missed punches or incorrect time entries, and how to request time off. Your team needs to know that all of this affects the business’ bottom line and can put their employment in jeopardy if they don’t comply.

Provide training on how to use the timekeeping system

To ensure accurate timekeeping, it's important to provide your team with adequate training on how to use your timekeeping system. This training should cover all aspects of the system, including how to clock in and out, record breaks, and correct any errors. Training your employees on how to use the timekeeping system helps them understand why accurate timekeeping is important for your business and their pay.

Regularly review timekeeping data

Start by setting a schedule for reviewing your timekeeping records. This could be weekly or bi-weekly, depending on the size of your business and your number of employees. As you review the data, look for errors like missing or incorrect time entries. Address any timekeeping errors with the employee responsible for the record or their manager. Regularly doing this can help you identify patterns and prevent future mistakes. You can also use technology to automate the process. Web-based timekeeping systems like Homebase can generate reports that show trends in attendance and time off requests. This makes it easier for you to identify timekeeping issues and track improvements. Make sure to communicate the importance of accurate timekeeping to your employees, and hold managers accountable for overseeing timekeeping in their departments.

Address Time Theft

Be vigilant against time theft. This includes instances of buddy punching, where employees clock in for each other, or when employees extend their breaks without permission. Using a time clock system like Homebase ensures your employees are clocking in and out accurately and that their hours are being recorded correctly. It can also deter employees from attempting to steal time. Make sure your employees understand that time theft is not tolerated and clearly communicate the consequences for engaging in this behavior.

Use Timekeeping Data to Make Decisions

Use the data you collect from your timekeeping system to make informed decisions about your business. This includes analyzing labor costs, identifying areas where productivity can be improved, and making scheduling decisions based on your employees’ availability and workload.