One of the biggest headaches for any organization is payroll. When you have over 1000+ employees, that payroll headache becomes a payroll migraine. It is easy to accept it as a part of life, but why live your life in constant pain? Instead of taking a pill to numb the pain, let us get to the root of the problem and prevent the migraine from happening in the first place.
Paper Time Cards – “We’ve Always Done It That Way”
Many construction companies have grown from small family-owned businesses to large corporations. They rely on their established processes to continue to build upon their success. However, in today’s dynamic environment of technology advancements, improvements can always be made. This is why the most expensive words in business are the phrase “We’ve always done it that way.”
For example, the persistent use of paper time cards in large enterprise companies is an expensive process that can be improved. One of our customers has 95 foremen who supervise 1000+ construction field workers. Each week 95 foremen x 5 hours = 475 hours per week spent on creating timesheets. At $45 per hour, this amounts to $21,375 being spent on Foreman completing time sheets. Each week.
But there’s more.
The superintendents drive from jobsite to jobsite collecting timesheets from their foreman. Once they collect the timesheets from the field, they drive to the office to deliver the timesheets to Accounting. Once delivered to accounting, the company’s five employees whose sole purpose is to manually enter the 1000+ timesheets for processing. With five employees x 40 hours per week = 200 hours for data entry. At $60 per hour fully burdened rate, this amounts to $12,000 spent on accounting clerks performing data entry of time sheets. Each week.
On a yearly basis, this construction company with over 1000+ employees spends the following:
Foremen completing timesheets: $21,375 per week x 52 weeks = $1,111,500
Accounting performing timesheet data entry: $12,000 per week x 52 weeks = $624,000
Annual spend on paper timecards = $1,735,000
But wait there’s more.
We have even heard of some companies that do not fully complete processing their time cards each week. Lots of back and forth and data entry bottlenecks the process, right? Nevertheless, the employees still need to be paid on a timely basis. After the Accounting team completes payroll and reconciles time cards, the accountants go back and fix errors with cost codes and negative time. Wow!
Does the “We’ve always done it that way” argument for paper time cards make sense?
Employee Time Tracking App – “There Must Be a Better Way”
Granted the company in the above example is widely successful. They are blessed with 1000+ employees and a large number of active projects. Perhaps the $1,735,000 is a small percentage compared to the company’s annual revenue. However, regardless of its past and current success, the company should still be open to new ideas, especially if new ideas pave the path to a better way.
The widespread adoption of mobile devices and the advancements in mobile applications have paved the path to a better way in timekeeping. According to a CTIA Wireless Industry Association, over 77% of Americans own a smartphone. So why not implement a time tracking app to digitize the electronic process?
The employee or foreman can clock in and out via mobile device to eliminate the hours spent completing time cards. Once employees enter their time through the time tracking app, the accounting team can log into the secure portal to access the time records. There is no longer any need to manually enter time information. The information is available in an electronic format to be downloaded and imported directly into the accounting system. An employee time tracking app delivers immediate time and resource savings by eliminating the need to complete time cards and then manual data entry.
With the hundreds, if not thousands, of time tracking apps available, following are some tips to help you choose the right time tracking app for companies with 1000+ employees.
Time Tracking Responsibility: Foreman or Employee
In the above example, the Foreman is responsible for creating the employee timesheets. Employee time tracking apps provide the flexibility for you to determine how you want mobile time entered.
— The Foreman enters time for his individual employees or his entire crew at one time.
— Individual employees enter time from their own smartphone.
— Individual employees can clock in and out from a time kiosk (an electronic version of the punch clock).
Many of our customers have chosen to put the accountability onto the employee to enter their own time. When employees have direct access to enter their own time, this eliminates any confusion on their paycheck. Through the app, they can communicate directly regarding any time card discrepancies. Additionally, freeing up the foreman from entering the time for his crew allows him to focus on other productive tasks to move the project forward.
Keep It Simple
With over 1000+ employees who need to transition and train onto a new system, it is important that the employee time tracking app be simple and intuitive. Many time tracking apps suffer from feature fatigue. The more bells and whistles that an app has – the more likely it will drain your battery, eat up your data, and just be hard to use. Keep it simple with a time tracking solution that makes it quick and easy to punch in and punch out. Your less tech-savvy workers will thank you.
Wage and hour disputes are the fastest rising lawsuits concerning employment litigation. With companies that have 1000+ employees, an FLSA complaint can have serious financial consequences. Employee time tracking apps provide large companies with an excellent source of record keeping to ensure FLSA compliance. Time tracking software allows companies to develop settings that automatically switch daily time hours to calculate for overtime and weekly time hours for overtime at defined thresholds. This helps to ensure that companies are paying employees for every second worked including overtime.
Paper time cards are often inaccurate, illegible, and even magically get lost. This can be very damaging in the event of an FLSA lawsuit. With the burden of proof on the employer, time tracking apps provide the reliable record keeping documentation required in FLSA disputes.
Project Management Integration
What is the #1 risk to profit on a job? Labor. An employee time tracking app allows project managers to track real-time labor hours. With time card integration to the project management system, project managers no longer need to wait for data entry clerks to enter time cards manually. Employee time tracking apps allow employees to enter their time towards specific jobs and tasks. With real-time labor information, project managers can proactively track actual costs versus estimated costs. This provides foreman and project managers with greater insight into labor productivity and gives them the ability to make adjustments to maximize profitability.
Similar to project management integration, an employee time tracking app that integrates with an accounting system is critical. The American Payroll Association estimates a 1%-8% error rate when totaling hours manually. An employee time tracking app delivers time information electronically to eliminate the need for manual entry. With Accounting integration, accounting personnel can download the time information in a flat file and import it directly into an accounting system or synced automatically into the system. The manual process that took hours and hours to complete can now be completed in minutes.
Professional Advancement for Employees
If an employee time tracking app makes your company more efficient, what do you do those employees whose sole purpose in life is to enter time card data? Sure, you can eliminate their position and save dollars on headcount. However, that is a sure fire way to keep folks from resisting future change.
Why cause fear when you can bring hope? It’s highly likely that those data entry clerks have other professional aspirations. Perhaps they would like to further their career in bookkeeping and accounting, and this transition provides them with an opportunity to develop their skills. Alternatively, they have a hidden graphic design talent that would be an excellent resource for marketing. Develop a professional development plan for those employees who have contributed to the success of your company rather than eliminating their position.
Companies that have more than 1000+ employees should move on from the constant headaches of paper time cards and the mentality of “we’ve always done it that way.” Why do time cards and payroll the same painful way? When employee time tracking apps prove, there is a better way (with fewer headaches) to save time and money.