The Costs of Manual Timesheets and How to Stop Losing Money

The modern working culture is based on the working hours of everyone connected to the business. Various methods are used for logging employee time, from punch cards and timesheets to time-tracking software.  

For a long time, businesses across various industries have used timesheets to keep track of working hours. Although they have benefited businesses, technological advancements offer greater accuracy and efficiency. 

Despite innovative solutions, some businesses still use manual timesheets because they are misinformed about cost-effectiveness. This blog will clarify the hidden costs of manual timesheets and demonstrate how digital time trackers can save significant business resources.

What is a Manual Timesheet?

A manual timesheet is a physical or digital document where employees manually record their work check-in and check-out times. It can also include details like breaks, leaves, and project details. 

This method is much easier to use and mostly depends on employees. The employees are given a paper sheet or a digital template to fill out at the end of each day and submit to the manager. Most businesses opt for daily records; however, weekly or bi-monthly submission is also practiced.  

8 Reasons Manual Timesheets Increase Expenses 

Filling out timesheets is heavily practiced in businesses where employees work hourly or on wages, such as construction and freelancing. However, this method is less reliable because the risk of inaccuracy is high due to issues like forgetting the exact time and time theft. 

Keeping the risks in view, sometimes otherwise deemed economical timesheets become extensively costly. Here are a few reasons why timesheets are a relatively expensive way of tracking time. 

1. Human Error and Inaccuracies

Manual timesheets are prone to human error. Usually, management asks their employees to fill out their sheets at the end of the working day. In a hurry to leave, they might not fill out the timesheet correctly and forget the exact time stamps for checking in and breaks. 

These inaccuracies can lead to payroll errors. You will either overpay or underpay the employees. In the case of overpayment, the business bears the cost, affecting the budget and profits. Underpayment affects business market credibility, making hiring new resources difficult. The business suffers a loss through no fault of its own. 

2. Cost of Paper and Storage

Though it seems economical because of the cost of paper or free templates, the direct and indirect costs of managing timesheets can go much higher. 

The direct costs include paper, printing ink or toner cartridges, and template storage binders. Additionally, filing cabinets or dedicated storage space are needed to archive physical timesheets for legal and auditing purposes. 

The cost over a certain period, including the maintenance of cabinets and storage spaces, is much higher, especially in large-scale industries. For example, if you have a staff of 1000 employees, you can’t get 1000 timesheets daily. With paper and printing costs, you will face storage issues. 

3. Higher Administrative Costs

Indirect costs of managing timesheets include administrative costs, i.e., hiring staff to manage timesheets or storage maintenance. The timesheets the managers or supervisors collect are sent to the human resource department. Collecting timesheets from all employees at the end of each pay period and complaining about the whole month’s data to calculate the payable amount is time-consuming. 

The administration has to monitor the authenticity of the timesheets and then compile the files. You might hire more employees with useful expertise once a month to meet the demands.

4. Compliance Risks

Time tracking is essential for businesses per recordkeeping requirements under the Fair Labor Standards Act (FLSA) . Accurate time tracking is required for compliance with these labor laws and regulations, which is difficult to achieve with manual timesheets. 

Manual timesheets often lead to non-compliance due to errors or deliberate falsification of hours. Businesses had to face lawsuits and penalties due to errors in time tracking, costing them a fortune and not to forget the company’s reputation. 

5. Data Security Concerns

Manual timesheets are prone to more security risks due to their physical nature and potential human error. Timesheet data can be tempered quickly and vulnerable to loss, theft, and damage. 

One of the biggest security concerns is that they can be lost, stolen, or damaged by fire, water, or other environmental factors. This can lead to the permanent loss of important employee work-hour records, complicating payroll processing and compliance.

Moreover, manual timesheets are easily accessible by unauthorized personnel. This can lead to breaches of sensitive employee information, such as personal details and work hours, costing the company big bucks in case of legal issues.

6. Employee Productivity and Morale

Filling out manual timesheets is tedious and time-consuming. Usually, employees don’t pay much attention to time accuracy as they don’t have much time to spare for such tasks. Not being able to finish tasks on time results in lower productivity, reducing overall efficiency.

If employees fail to provide accurate time data, this is reflected in their paychecks, which lowers their motivation for the company. Pay differences cause conflicts between employees and management, intoxicating the whole floor. Such discrepancies pollute the work environment and increase turnover, impacting your budget and time. 

7. Inefficiency in Handling Overtime and Attendance Issues

Handling overtime manually is more complex. Management often double-checks over time, which can delay payments. Management may also take extra time verifying overtime hours and cross-referencing schedules. 

Also, managing leaves is difficult in manual time tracking. If the employee is absent, the manager must fill in the sheet. The management then has to confirm the manager and the employee in case of missing information. 

If the employee, manager, or payroll department fails to cooperate, the enterprise will collapse, creating more conflicts. 

8. Time-Consuming Process

The reasons mentioned above directly or indirectly increase costs and affect time management. Maintaining timesheets improves time management, and you lose precious time when you tie yourself up in unnecessary descripneces.   

First, your employees spend valuable time filling out timesheets, and then the supervisors verify them. Later, the HR personnel spend even more time reviewing, approving, sorting, and compiling them. In addition, if issues like lawsuits or conflicts happen, management has to step in to solve the matter, wasting your time and resources. 

Although manual timesheets become part of the workflow, they burden everyone in the long run and reduce overall productivity and efficiency within the organization.

Digital Time Trackers Vs. Manual Timesheets: The Better Approach? 

Digital time trackers are a modern alternative to manual timesheets. Based on the manual timesheet concept, they automate the recurring task, saving time and the added cost of managing manual time records. Here is why automatic time trackers are a better approach. 

Improved Accuracy 

They automate the time-tracking process. Your employees just have to start the timer, and you get the total hours they have worked. This action reduces the potential for human error and provides accurate data. 

Controlled Costs

Digital time trackers may cost you a certain amount; however, the costs are fixed and much less than those of everyday paper and storage, and as the data is authentic, you don’t have to face penalties. 

Ensure Compliance 

Digital time trackers enhance compliance by providing accurate, easily audited records. These software are built so you don’t have to take additional measures to meet labor laws. Also, they offer data security measures, protecting sensitive employee information from breaches.

Real-time Insights and Increased Productivity

Time-tracking software provides real-time insights into each employee’s productivity. You can analyze their working and time utilization patterns and make informed decisions to improve individual and overall productivity. 

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Advanced and Innovative Technology

Digital time trackers seamlessly integrate with payroll software, project management tools, communication software, etc, allowing you to streamline a structured workflow. They improve efficiency and reduce your time and efforts, keeping you up to speed with the changing times.  

Promoting Transparency and Employee Morale

Time trackers also show employees their time utilization and working patterns so they know they are fairly compensated. This mutual understanding promotes discipline and employee morale and reduces turnover. 

TimeBee for Automated Timesheets 

TimeBee is a leading digital time-tracking and employee-monitoring software that provides an innovative and convenient solution to all industries. It streamlines recording and managing employee hours by automating timesheet entries, eliminating the errors and inefficiencies associated with manual timesheets. Here are a few benefits of using TimeBee that offer genuine value for your money. 

Effortless Time Tracking 

TimeBee simplifies logging work hours. Employees just have to start the timer, which automatically tracks their time. This automation reduces the chances of inaccuracy on the employee’s part. 

In addition to logging hours, TimeBee also tracks the breaks taken by the employee. You can easily access individual and team time data from the dashboard.  

Detailed Productivity Reports 

TimeBee offers detailed reports on employee work hours in the form of timesheets. You can analyze an employee’s performance in tasks and projects by tracking the time they spend on them. In addition, you get productivity analysis for a quarter. These reports can be customized to show data for specific time periods, teams, or individual employees.

In addition to employee time records, these reports enable you to make data-driven decisions, such as reallocating resources, adjusting workloads, and implementing performance improvement plans.

Compliance and Data Security 

TimeBee helps businesses comply with labor laws and regulations with accurate time tracking and detailed records. This data cannot be tempered, ensuring time records’ authenticity. The availability of these sheets in just a few clicks mitigates the risk of fines and legal issues.

Moreover, TimeBee takes security measures to protect sensitive employee data, keeping timesheet records safe from unauthorized access and breaches.

Automated Workflow and Ease of Use

Data retrieval and sorting are effortless in TimeBee. Managers don’t have to compile data by themselves; they accumulate working hours, which helps calculate billable hours and payroll. 

You can access an employee’s time and productivity data for up to a year without storage issues, and you don’t require additional administrative staff to manage and sort employee data. No matter how extended your teams are, even if you have numerous remote employees, the data is easily accessible. 

Using TimeBee, businesses can significantly reduce the hidden costs associated with manual timesheets. Automating time tracking frees up administrative staff to focus on more strategic tasks, while the accuracy and reliability of digital records ensure that payroll is processed smoothly and without errors.

Conclusion 

In conclusion, modernized and updated automation businesses improve operational efficiency and market competitiveness. Manual timesheets are a good option; however, numerous hidden costs and inefficiencies make them less convenient for medium- and large-scale businesses.

Digital time trackers like TimeBee offer value for your money by providing accuracy, security, and efficiency in time tracking. Whether for small businesses or large enterprises, TimeBee is the best choice for managing employee hours and optimizing workforce productivity.  

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