February 22, 2024

What is employee timekeeping software?

What is employee timekeeping software

Managing employee timekeeping with precision and efficiency is a fundamental yet challenging endeavor. Traditional methods often falter, leading to potential errors in payroll calculations. These errors can have costly consequences for the organization, such as penalties for labor law and union rule violations. They also affect the employee by contributing to a poor employee experience.

Employee timekeeping software can minimize these concerns by automating time collection and payroll calculations, making it faster, easier, and more accurate. This technology addresses the critical challenge of managing labor costs efficiently and eliminates manual or error-prone timekeeping processes. By implementing automated timekeeping solutions, organizations can control costs by improving accuracy and compliance and improve the employee experience.

This article will show you how features of employee timekeeping software, including flexible time collection and automated payroll rules, can revolutionize your organization’s approach to timekeeping and how it can improve both your bottom line and the employee experience.

What is timekeeping software?

Timekeeping software is a specialized tool designed to automate time collection and payroll rule calculations. These features allow organizations to create, implement, and manage streamlined timekeeping systems, ensuring employees receive accurate pay and eliminating manual processes that often lead to costly inaccuracies, inefficiencies, and compliance risks.

With payroll employment increasing by around 216,000 in December 2023, an effective timekeeping system is more prudent than ever for small and large organizations alike. However, the functionality of timekeeping systems varies across different platforms. Understanding the key features of these systems will help you find one that not only aligns with your organization’s requirements but also refines its performance and accuracy.

What are the main features of employee timekeeping software?

The features of employee timekeeping software vary, but certain elements are essential to ensuring efficiency and accuracy. Your timekeeping software should include these core capabilities:

Track work hours

One of the most important functions of timekeeping is time capture, or the collection of data pertaining to employees’ working hours. Time clocks stand out as a fundamental feature in employee timekeeping because they offer the most accurate and efficient time capture processes. While common alternatives like paper timesheets may seem straightforward, quality time clocks use time capture data to manage timekeeping automatically, making them more precise and reliable.

The ideal timekeeping software will offer you flexible and adaptable time clock solutions to suit various work environments and employee needs. For instance, while a wall terminal with a badge reader may be the best option for professionals who work in secure buildings, employees who travel or work at multiple job sites might benefit from the accessibility of a mobile time clock with geofencing or geolocation. The right time capture solution enables this level of versatility to ensure that all employees, regardless of their working location or style, can accurately record their time.

Track overtime

Tracking overtime accurately is a critical feature of employee timekeeping software. Not only does this help keep labor budgets in check, but it also enables compliance with various federal, state, and local regulations, Here are some examples of overtime calculations your timekeeping solution should have the capacity to handle:

  • Overtime thresholds: Overtime calculations vary by organization, and a single organization may require multiple overtime rules, such as hourly, daily, or weekly.
  • Weighted/blended overtime: When employees have different pay rates for different roles within an organization, their employer must calculate their average pay rate to determine their weighted overtime pay, or the amount they receive when they work overtime hours in any role.
  • Compensatory (comp) time: In the public sector, some organizations can allow employees to choose between overtime and comp time, or paid time off, at a rate of 1.5 times their regular pay rate.
  • Variable overtime: When employees work fluctuating hours, their overtime is calculated by dividing their annual salary by the number of hours worked to obtain a regular rate of pay.

Manage exceptions

Exception management in timekeeping software allows for real-time monitoring of deviations from regular work patterns, such as:

  • Missed punches
  • Long shifts
  • Irregular breaks
  • Clocking in early
  • Clocking out late
  • Being absent
  • Tardies

This feature is paramount in identifying and addressing exceptions as they occur, which improves payroll accuracy and removes stressful payroll bottlenecks down the road.
Handle complex calculations and compliance rules
Every employer has different rules regarding payroll and compliance, and some are quite complex. Many timekeeping platforms don’t have the capability to accommodate these nuanced policies, making it difficult for organizations to manage their employee timekeeping processes accurately. The right timekeeping software should adeptly manage intricate company policies, labor laws, and union rules, ensuring that all wage and hour calculations are precise and compliant. Examples of these complexities include:

  • Paid breaks and meal breaks: Organizations that offer their employees paid breaks or meal breaks must calculate the employees’ breaks into their pay.
  • Pay rates by position: Employees who work in multiple roles may receive a different pay rate for each position.
  • Shift differentials: Some institutions offer employees a shift differential, which is a higher pay rate for working non-standard days or hours, such as nights, weekends, or holidays.
  • Different overtime rules and periods: Some organizations have employees with varying overtime requirements based on factors like their job type, salary, and union rules.
  • Supplemental pay: Employees may receive supplemental pay in addition to their base salary, such as commission or bonuses.

Digitize timesheets

For most organizations, the accuracy of time clocks makes them the ideal choice for employee timekeeping. However, sometimes organizations in certain industries—particularly the public sector—prefer to use timesheets to track employee hours instead of time clocks. In this case, it’s still critical to use timekeeping software that supports electronic timesheets. While paper timesheets are prone to human error and require staff to complete tedious, time-consuming tasks, their digitized counterparts automate the process for increased accuracy and optimal efficiency.

Integrate with other systems

Integration capability with other systems, especially payroll processing software, is a key feature of sophisticated timekeeping software. This ensures that timekeeping doesn’t operate in isolation but instead works in tandem with other key operational systems. When these systems work together, they increase efficiency—particularly for double-entry accounting processes—and eliminate wasted resources and human error.

Generate reports

Report generation is a practical tool for proactive management and decision-making. It should provide real-time visibility into key performance indicators (KPIs) like hours worked, overtime percentages, and productivity, enabling leaders to promptly identify and address issues. This real-time reporting helps organizations prevent overtime budgets from spiraling and compliance issues from developing.

Function as part of your larger time and attendance platform

Some timekeeping software functions work in isolation, accommodating only basic time collection and payroll rules calculations. The right timekeeping system should be a part of a comprehensive time and attendance solution, including leave management and labor tracking/job costing. This holistic approach ensures that all aspects of time tracking are unified, providing a more efficient and cohesive experience.

Benefits of timekeeping software

By automating and streamlining timekeeping processes, a robust timekeeping system not only improves accuracy but also boosts productivity, supports compliance, and improves employee satisfaction. Here are some of the core benefits of timekeeping software:
Improve accuracy by minimizing data entry errors
Automated timekeeping systems minimize the risk of human error, ensuring that time records are accurate and reliable. This precision contributes to payroll accuracy, which prevents compliance issues and builds trust and satisfaction among employees who rightfully expect that their paychecks will be correct.
Maximize productivity by automating timekeeping
Automated timekeeping boosts productivity by creating efficient workflows. This powerful upgrade allows all personnel to focus more on their core responsibilities rather than tedious administrative tasks, including:

  • Employees: Remove complicated or clunky clock in and clock out processes and the need to deal with paper timesheets
  • Managers: Collect and approve timesheets and avoid handling weeks-old exceptions
  • Payroll directors: Eliminate the need to send aggressive email reminders about timesheet due dates, overdue timesheets, and exceptions managers need to resolve to ensure employees receive accurate pay

By alleviating the burden of manual timekeeping, employees feel more empowered to use their time to focus on excelling in their roles and contributing to the success of the organization.

Maintain compliance

Timekeeping systems play a crucial role in maintaining compliance with labor laws, collective bargaining agreements (CBAs), and internal policies. This helps companies avoid legal issues and penalties associated with non-compliance, safeguarding the company’s reputation and financial stability.

Provide transparency by giving employees visibility into their hours

Providing staff with visibility into their own time records promotes transparency and trust. This feature allows employees to verify their hours worked, ensuring that they’re compensated appropriately and that there are no discrepancies in their paychecks. It also provides on-demand access to their hours worked, which allows them to keep their own records and recognize and address potential concerns with management.

Improve the employee experience by simplifying time capture

Effective timekeeping software streamlines time capture, which has a positive impact on the employee experience. Accurate and easy time recording prevents incorrect paychecks, delayed exception reconciliations, and time-consuming paper processes, which can be major sources of frustration for employees. Additionally, having a user-friendly, intuitive process for keeping track of their hours reassures employees that their employer respects their time and values them as employees.

Control costs by improving timekeeping accuracy

Precise tracking of working hours facilitates accurate payroll expenses, leading to better financial management. Controlling costs means the company can save indispensable funds for improving or growing the organization rather than spending it on inaccurately calculated payroll or compliance fines. In fact, the ROI of timekeeping software greatly outweighs the investment.

Avoid payroll delays and unnecessary costs with real-time reporting

Real-time reporting in timekeeping software grants immediate visibility into hours worked and potential exceptions. The right timekeeping software for your organization should support:

  • Proactive overtime management: If an employee nears overtime, real-time reporting will notify management that they’ll be in overtime soon if they work more than a certain number of additional hours that week.
  • Real-time decision-making for leaders: If something occurs that managers need to handle immediately, such as an employee clocking in late, real-time reporting allows them to find out in the moment instead of after the fact—or not at all.
  • Workflow efficiencies: Real-time reporting and notifications help timekeeping workflows run smoothly. For example, both employees and managers can review and approve hours digitally to ensure hours are correct and ready for payroll. Managers can approve exceptions as they happen, and payroll leaders have visibility into any exceptions that must still be addressed before payroll can be run.

Understanding these benefits, along with the basics of time and attendance software, is essential for choosing a solution that aligns with the needs of your company and its workers. The right timekeeping system can bring transformative improvements to your organizational operations and employee experiences.

Automate your employee timekeeping process with TCP Software

Employee timekeeping software is an essential tool for modern organizations, designed to simplify and automate the complex task of tracking employee hours and preparing them for payroll. Without the right tools, organizations are faced with payroll inaccuracies, increased compliance risk, inefficient workflows, and poor employee experiences.

TCP provides automated timekeeping as part of a holistic time and attendance solution. We offer a suite of flexible time capture options and robust rules engines that can be configured to the unique needs of each customer—no matter how complex. With actionable insights delivered instantly, it eliminates payroll bottlenecks and unexpected overtime, equipping leaders to make informed decisions that keep budgets and payroll on track.

To learn more about how TCP can transform your time and attendance processes, download our report, “5 Ways Time and Attendance Boosts Your Bottom Line” or speak with an expert to identify your timekeeping needs and find the best solution for your organization.

FAQs about employee timekeeping software

Timekeeping is vital for ensuring accurate payroll, regulatory compliance, and effective labor budget management. It also enables fair and transparent practices, which minimize perceptions of favoritism or unfairness that can negatively impact the employee experience. When employees have visibility into their hours and pay, they feel respected and are more likely to stay with the organization.

There are several methods to track employee hours, including manual timesheets, punch clocks, and automated timekeeping systems. Of these, automated timekeeping solutions are the most reliable and effective, offering accuracy, ease of use, and improved compliance. Time clocks integrated with timekeeping software add an extra layer of precision and data integrity, making them an ideal option for organizations with employees anywhere—in the office, in the field, at home, or in multiple locations.

When selecting timekeeping software, ensure core features are addressed, like automated time collection and payroll rules calculation, real-time reporting, and ease of integration with other systems. However, the best option for any organization is a solution that can be configured to your specific needs, ensuring a long-term solution that benefits your organization and your employees.

In addition to a highly flexible and comprehensive product, the company should also work with your organization as a true partner by offering implementation, training, ongoing support, and regular adjustments to your system based on your evolving needs.

Employees can access and view their hours with a timekeeping solution that offers 24/7 self-service access across multiple devices, including mobile. This transparency and accessibility is essential to the employee experience, as it allows employees to have an active role in the timekeeping processes that influence their work-life balance.

You can integrate with your payroll provider by choosing a timekeeping system with robust integration capabilities, ensuring seamless data transfer to your payroll provider. This minimizes administrative workload and errors that can lead to excessive costs and decreased employee satisfaction.

Accurate timekeeping manages labor costs by providing accurate payroll calculations, optimizing workflows, and preventing costly compliance issues. It also allows organizations to monitor exceptions in real time by providing visibility into overtime trends and thresholds.

The right timekeeping solution for your organization offers a suite of time collection options to suit each of your employees’ working environments. For example, you may select a badge reader for employees who work in the office and a mobile time clock with geofencing and geolocation features for employees in the field. This flexibility ensures that all employees, regardless of their location, can accurately record their time.

Timekeeping is intrinsically linked with leave management and labor tracking/job costing. These elements work together within a time and attendance solution, providing a holistic approach to time tracking. With a comprehensive system that includes all of these elements, an organization can create effective and streamlined processes for essential employment functions, including:

  • Hours, pay rates, and shift premiums
  • Leave policy rules and management
  • Exceptions management, including overtime
  • Labor law, union, and organizational policy compliance
  • Real-time reporting