Here are some examples of what you could save...

But will you really save money?

If you select the correct products and the right supplier its is almost certain that you will save start saving money after a relatively short time. In fact , if you take a look at the next table you will see some very surprising results based on the average cost of a fully automated time and attendance system for 50 employees. The return on investment can be very attractive. Note that is a cash flow ROI rather than a true investment ROI in which you would amortize the capital investment over the life of the asset (or faster in some cases) which would result in a more even projected return across the years.

ROI Based on 50 Employee System with 1 % Saving on Annual Wages

Too Good to Be True?

While your business should receive a benefit from a properly sourced and implemented time and attendance system you may not achieve the average savings of 1 to 5 percent of your annual payroll bill.

In the following example we have reduced the savings to one half of one percent. Again this is a cash flow ROI but it graphically demonstrates how much money you can look forward to saving in by investing in a time and attendance system.

ROI based on 50 Employee System with ½ Percent Saving on Annual Wages

There is little doubt that a quality time and attendance system will save your company time and money. The key to both a successful implementation and ongoing value is careful selection of product and supplier. Get this wrong and you will join the alarmingly high number of companies who report being dissatisfied with their time and attendance software or supplier or their choice of hardware.

One of the most common claims in the time and attendance industry is that an automated time and attendance system will reduce your annual payroll bill by up to 6%. Is this true and how is this significant saving achieved?

Lets first take a look at where these savings are achieved.

Buddy Punching. If time theft or budding punching is present in you application then this is clearly a wages cost which will be addressed if you introduce a more secure punch clock system. This can either be a biometric system of a camera equipped proximity or RFID time clock. Employees will no longer be able to clock on or off for each other so there will be a temporary reduction in employee payroll hours through late arrival deductions. However, once  after a short time employees will start to arrive at work on time and leave on time and the benefit in reduced wages will not be apparent. It is likely that any permanent advantage is likely to be seen in productivity improvements.

Overpayments to Employees through Payroll Calculation Errors. Payroll calculation errors are common. They impact both overpayments and underpayments to employees and generally these account for equal the amount of errors. However, when the errors are in favour of the employee they are much less often reported. By comparison, when the errors disadvantage the employee they are almost always reported.

Reduction in Payroll Preparation Time. In a larger business and automated time and attendance system can reduce the staffing requirements from 2 or more staff to just 1. This is achieved through automatic payroll hour calculation and export into payroll saving many hours of data entry. This is a clear benefit. In smaller companies where the payroll officer works full time on payroll it can free them up to work on other payroll related issues such as workers compensation claims for example. Clearly there is a time saving advantage but it must be taken advantage of. Many companies introduce time and attendance and reduce the pressure in payroll only to find that the remaining work artificially expands to fill the available time.

By comparison, many smaller (and some not so small) companies have found payroll preparation times increased because they have selected an unsuitable product.

Payroll software is pure expense. It is very difficult to find a tangible return on investment from a payroll system. This can often mean that it is difficult to justify the expense of upgrading to a new payroll system. The old one probably works reasonably well so it could be that the appeal of the new system is ease of use of just simply modernising your payroll software.

This is where Time and Attendance Software can help. When combined with a new time and attendance system your payroll software investment can be viewed as part of the total payroll system upgrade and the cost of the payroll software system can be absorbed in and recovered through the significant benefits you are likely to receive by implementing automated time and attendance software.

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