August 6, 2021

Building a Business Case for Time & Attendance Software

You already know that time is money. You see the value of time tracking software for monitoring employee time and processing payroll. And you’re ready to minimize the amount of time you expend doing that.

But if you hope to convince your boss, you’ll need to show that time and attendance software does more than make your job easier. It reduces employees’ unproductive or stolen hours, eliminates costly errors and keeps your organization compliant with labor laws.

These challenges cumulatively impact organizations to the tune of $11 billion per year!1

To make your business case, you’ll need to include the four crucial components of employee time tracking and calculate the potential impact.

Here’s how to do that.

Time-Tracking Software Helps Increase Productivity

The top three impacts to productivity include:

  • Inefficient manual processes that slow down operations, are prone to error and fail to capture hidden costs. 50% of professionals who do not have automated systems say manual data input and data adjustments are the most time-consuming parts of the process1
  • Employee time wasted doing non-work-related things, which is costing you far more than you may realize.
    Would you believe that on average, office workers spend only about 2.8 hours of the workday on high-priority or critical tasks? Instead of working, they spend 44 minutes checking social media, 65 minutes browsing news sites, 40 minutes discussing work with officemates, 17 minutes on coffee breaks, etc.1 Time-tracking software can help hold employees accountable for how they spend their time at work.
  • Payroll inaccuracies, which can include incremental inaccuracies by rounding up hours, and time theft, which includes buddy punching (coworker clocks in for a friend) and failure to report tardiness or time away from work during the day. According to a study conducted by Robert Half International, employers lose about 4.5 hours every week per employee to all different types of time theft.

49% of American employees openly admit to time theft, which can take as much as 7% of your gross annual payroll.1

Do the Math

When a nationally recognized suburban public school transitioned their 600 hourly workers to employee tracking software, on-time timesheet processing (previously at 40%) increased by more than 100%. The payroll specialist’s productivity increased by 50% by eliminating off-cycle processing and payouts, reminder emails and manual timecard approvals.

Time tracking software has been shown to reduce time spent processing timecards from seven minutes to one minute per pay period.1

Calculate similar annual time savings for your company

A. Before time tracking software

B. With time tracking software

Hours saved annually with time tracking software (A – B)

Avoid Costly Errors from Manual Processes

According to a 2019 WorkPuls survey, 80% of those surveyed who use paper systems reported that they correct 80% of the timesheets they receive. These payroll inaccuracies can be caused by errors in data entry or employee time theft.

One client using a paper-based process to track time for 500+ employees was losing $18,000 a month on payroll inaccuracies. Implementing TCP time-tracking software resulted in $500,000 savings in just one year. While this may be a more extreme case, research shows the average cost of errors from manual processes to be between 1-8% (for our calculations below, we opted to split the difference with 4%).

Do the Math

Calculate similar savings you could see by eliminating payroll inaccuracies in a paper-based system (i.e. spreadsheet)

Amount saved annually

Compliance Risks of Inaccurate Pay

The biggest threat for most businesses is not overpayment, but the inability to prove accurate pay. Employees working off the clock, logging in and out earlier or later than scheduled, or failing to record tardiness violate Fair Labor Standards Act (FLSA) regulations. This is more common than you may realize. 48%1 of US employees report working late in the office or bringing work home and 33%1 of salaried employees report that they work on the weekend.

In the event of a lawsuit, a timecard showing that an employee has worked 8 hours day, 5 days a week will not be considered admissible. The Department of Labor considers that a work schedule, not a legitimate timecard, as no real human works those precise hours.

This is a credible risk to your organization. More than $1.4 billion in minimum wage and overtime violations was recovered by the US Department of Labor’s Wage and Hour Division since 2015.1

One lawsuit far exceeds the cost of employee tracking software. But as residential nursing facility Century Care Management discovered, the consequences could be even more detrimental. They faced strict new regulations that required the laborious challenge of setting up employees with different job codes and exporting accurate hours. Failure to pass annual inspections could result in the loss of Medicare and Medicaid funding and their accreditation. Implementing TCP systems removed the hassles and reduced this technically demanding work by 50%.

For compliance risks and requirements, your best defense is a true time-tracking system.

Do the Math

Calculate the number of employees that are likely violating FLSA regulations simply by trying to get their work done after hours:

Employees at risk of non-compliance

Improve Data-Driven Decision Making

Should you hire more people, give someone a raise, let some people go or transform your work processes? How do you budget for new projects? It’s impossible to improve productivity if you don’t know where the weak points are.

Project planning is a key area of loss for many organizations. According to a study by McKinsey & Co. of more than 5,000 large IT projects, “the average project ran 45 percent over budget, blew past its deadline, and delivered 56 percent less value than predicted.”2 These failings threatened the very existence of 17% of the companies.

Just as you rely on data to make purchasing, expansion and other decisions in your business, workforce time tracking can generate actionable insights for increasing productivity and efficient use of worker talent and time.

Studies show that companies that use an integrated timekeeping and payroll solution can exceed revenue targets by 7%.1

Calculating Your Time-Tracking Software ROI

Even if you were already sold on the value of time-tracking software, the truth about the high cost of payroll inaccuracies, manual processes and errors can be eye opening.

Round out your business case to your boss by showing you’ve done your homework. Download our Workforce Management Software Buyer’s Guide to prep you for your search and even get a free quote from TCP Software to get you started!


1 Finances Online, “72 Critical Time Tracking Statistics