When you think about the cost of paper timesheets, the first thing that comes to mind is probably the amount you spend on paper. But the truth is, if you’re still relying on paper timesheets to track your employees’ time and process payroll, there are far more hidden costs than just the cost of paper—and those costs can have a seriously negative impact on your bottom line.
So, when it comes to paper timesheets, what are the actual costs to your business? How do paper timesheets play into the profitability and productivity of your business processes? And how can you streamline your timesheet process to recoup those unnecessary costs and make your business more efficient and sustainable?
The time costs of paper timesheets
One of the biggest costs of paper timesheets to your business? Time.
Using paper timesheets to track time and process payroll costs a tremendous amount of time. Some of the common time costs of paper timesheets include:
- Distribution. In order for your employees to fill out and submit a paper timesheet, they need to have a timesheet in their possession. That means you have to spend time distributing paper timesheets to your entire team—and if someone loses their timesheet during a pay period, you’ll need to get them another copy before their timesheet is due.
- Collection. Just like you have to distribute paper timesheets to your employees, when the end of the pay period rolls around, you also need to collect all of those timesheets. Depending on your business model, that could mean driving to different job sites or chasing down individual employees who haven’t filled out or submitted their time card.
- Submission. Many employees will wait until the last minute to fill out and submit their paper timesheets. And the more employees that take their time in completing their paper timesheets, the more of a time crunch it creates for you to process those timesheets and run payroll on time.
- Processing. Once you’ve tracked down all of your paper timesheets, you have to manually review them, calculate each worker’s hours, wages, and tax withholdings, and then enter that into your system to run payroll. Not only is this process tedious, but it’s unnecessarily time-tconsuming.
The point is, paper timesheets cost your business a huge amount of time—time that, as a business owner, you could be spending on more important, fulfilling, or profit generating activities.
The accuracy costs of paper timesheets
Not only are paper timesheets more time consuming, they can also be less accurate—and that can cause major problems for your business.
Paper time cards as a time tracking system can be rife with inaccuracies. Some of the accuracy costs of paper timesheets include:
- Inaccurate time reporting. With paper timesheets, you’re trusting your employees to self report their hours accurately. But chances are, they won’t. And whether their misreporting is deliberate (like purposefully writing on their timesheet that they arrived at work at 8am when they know they showed up closer to 9am) or accidental (for example, knowing they arrived around 8am, so writing 8am on their timesheet, even though they actually arrived at 8:06am), it leads to time tracking errors—which, according to data, can cost employers in the United States a whopping $400 billion in lost productivity each year.
- Human error. When you rely on paper timesheets for time tracking and payroll, you leave the door open for human error. For example, your employee might fill out the timesheet incorrectly, filling in hours on the wrong days—or you may have trouble reading their handwriting, misinterpret what they wrote, and end up paying them for more or fewer hours than they actually worked.
- Disputes. If hours aren’t accurately reported or recorded, it could lead to disputes over hours worked, total amount paid, or tax withholdings.
- Budgeting. if your employees are inaccurately reporting their hours, it’s hard to determine how much payroll budget you need to allot for future projects—making budgeting and financial projections extremely challenging.
In order to run your business effectively, you need an accurate picture of your employees’ hours and your payroll spend—but the inaccuracies inherent with paper timesheets can make it difficult (or even impossible) to get that picture.
The efficiency costs of paper time sheets
Paper timesheets create financial, time, and accuracy costs for your business. But they also present efficiency costs.
Paper timesheets can negatively impact the overall efficiency of your business in a few different ways, including:
- Access to data. When you’re manually processing paper timesheets, you don’t have the same access to data that you’d get with a digital time tracking and payroll solution; for example, you can’t run reports, compare payroll spend between pay periods, or easily track overtime hours. This makes it harder to dig into your overall payroll costs and identify any issues or areas for improvement.
- Inability to take a “big picture” view of your business. Paper timesheets force you to individually collect and manually enter payroll data for each employee. This can make it harder to get a more comprehensive view of what’s going on with your employees, hours, and wages as a whole.
- Legal issues. As a business owner, you’re required to maintain accurate timesheets and payroll records. But paper timesheets can easily get lost or damaged—and if they do, you don’t have any digital records to back them up, which can cause legal issues (for example, if your business is audited or is the subject of an employee lawsuit).
Bottom line? You want your business to run as efficiently as possible—but paper timesheets just don’t allow for a high level of efficiency in your time tracking and payroll processes.
How Hourly can help you take back the costs—financial, time, accuracy, and efficiency—of paper timesheets
Clearly, paper timesheets drive some major costs—financial costs, time costs, accuracy costs, and efficiency costs—for your business. Which is why, if you want to recoup those costs, you need a better, more effective solution to track your employees’ time.
At Hourly, we make it easy for business owners to quickly, accurately, and efficiently track their employees’ time and process payroll directly from their mobile devices—and without the need for costly, time-consuming paper time cards.
The Hourly app includes a host of features designed to streamline the time tracking and payroll processes, including:
- Employees can clock in, clock out, take breaks, and sign and submit their timesheets—all from their mobile phones
- Real-time GPS tracking
- Automatic timesheet collection
- Automatic overtime calculation
- Robust reporting features
Want to learn more about Hourly’s employee time tracking solutions and how they can support your business? Sign up for a free 14-day trial today!