Really fast high school track stars can run the 55 meter event in about 7 seconds. That’s 165 feet, or just over half a football field, in less time than it takes to reheat a Krispy Kreme doughnut in the microwave. However, the world record time is 5.9 seconds set almost 20 years ago. So the difference between a 2 decade old, hard to beat world record, and really fast high school boys, is about 1 second. Just one second is the amount of time that separates most competitors from world record domination. To the uninformed, one second seems inconsequential, but it’s a life-changing difference to a runner. If you own a service-oriented business with remote, hourly workers, you may not be totally informed about the huge difference that another tiny number can make in your labor cost.
Studies indicate that companies who use handwritten time cards lose at least 10 minutes a day to employees padding their hours. That’s 5 minutes on the time in, and 5 minutes on the time out. Five minutes seems insignificant until we break the numbers down.
Five minutes lost twice a day, 5 days a week, is 50 minutes a week. That’s 2600 minutes a year. Now the reality check. This equals 43 hours. So the seemingly harmless 5 minute loss on each side of a shift turns into a nice paid vacation that your employees are rewarding themselves.
And you never know the exact time worked when employees fill in their own hand-written timesheets. It is shocking to learn that 75% of time theft goes undetected. As a business owner your bottom line feels it. There is an easy solution.
Shaving a second off the 55 meter dash is virtually impossible, but reclaiming 10 minutes a shift for your business is simple. Our telephone and app-based timekeeping system can save your small business 2-6% on payroll by replacing employee manipulated handwritten time cards with easy-to-use technology. Since labor cost can be upwards of 50% of a service business’ total expenses, this 10 minute savings can impact profitability to make businesses come out a winner each month.
And it only takes one second, to decide to get started saving money. Stay tuned and stay in touch by following us on Facebook.
The paint by numbers sets were so much fun as a kid. Just follow the pattern established by the numbers and you could paint a beautiful picture. Numbers are funny that way. They can paint pictures that are worth more than a 1000 words. If you are a small business owner with off-site hourly employees and you’re not minding your labor cost dollar numbers closely, the picture they paint may not be very pretty.
Let’s look at some numbers.
You started out with a target labor cost of 50% for the job. You spend an entire day gathering payroll data and putting numbers in a spreadsheet. Not only is this number gathering wasting your precious time, but because you don’t utilize an automated time tracking system your labor costs are 70% of revenues and you eke out a 10% profit. The struggle is real. But why are labor costs at 70%?
In studies done by the American Payroll Association and the Robert Half Agency, it’s shown that employees steal 10 minutes a day. (It’s extremely easy to take an extra 10 minutes a day when using handwritten time cards.) Employees can write down whatever clock in, clock out times they want. You’re lucky if it’s only 10 minutes a day. But we’ll say 10 minutes a day using an example of 15 employees – that comes to 150 minutes a day or 3262.50 minutes a month (54.375 hours) based on 5 day work weeks. Chronotek’s new Weekly Labor Cost Report can calculate your actual Labor Cost for you automatically. The report also takes into consideration the fully loaded pay rate. So if the employees’ pay rate is $8/hr, it might be that you are actually paying close to $9/hour considering taxes and workman’s comp. So you’re throwing $489 out the window every month on these handwritten time cards (that hurts a little bit).
Instead, embrace the wonder of technological accountability with an automated timekeeping system and take back your money. An investment in our system of $89 a month for 15 employees yields a return of $400 back in your pocket. That’s 4.5 times your investment and raises your net profit by 25%. If you pay your employees more than $8 an hour, then you’re making more money faster.
It’s time to get your money back. No more unearned pay and no more laborious spreadsheets. This is why we created the new Weekly Labor Cost Report that enables you to track true labor costs (pay rate + payroll taxes) against your labor budgets. A picture is painted using the exact numbers.
Stay tuned and stay in touch by following us on Facebook.
Well-known financial advisor and motivational speaker, Suze Orman asked her audience how many had personal debt, of any kind. Almost 100% of the people in the audience raised their hands. To paraphrase her response she said, “So you all have debt, and you come here asking me to show you how to manage money you don’t have?” Such a poignant question. Just like families who discover that they don’t have enough money to pay their bills each month, many small businesses with remote, hourly workers struggle to make payroll, and pay their vendors and other overhead expenses.
It is hard for small businesses that aren’t efficiently tracking their largest monthly expense: time worked by hourly employees. Our clients have the advantage when they use the new Weekly Labor Cost Report. This report quickly calculates true labor costs (pay rate + payroll taxes) compared to the job’s labor budgets.
In an interview we did last year with David, the owner of a successful janitorial company, he stated that a service business can pay up to 50% of their gross revenues in payroll, but it should not exceed that number. However, we have talked to several small business owners who estimate that they pay up to 70%, and they struggle for a 10-15% profit margin. Profit margins and hourly payroll expenses are tied together in a constant, unequal tug of war. This results in cash flow problems at the very least.
While Suze tries to help her crowd manage money they don’t have, we want to help small businesses reclaim the money that is rightfully theirs. Run the new Weekly Labor Cost Report to stay on track. It’s an easy step towards getting your dream back as well.
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