It’s easy to fall into a money trap. Maybe you drink a Red Bull once a week for an extra kick start on Monday mornings. Who could blame you? Mondays are Mondays. It’s a great $2.50 a week investment. But then you’re strolling through Costco and you see a case of Red Bulls for $32.50. That’s 24 cans at $1.35 each; about half the cost of your convenience store. “What a deal!” you exclaim and run over a little old lady in your excitement to load the case on your flatbed shopping cart. Now what was just a Monday treat is also your “get me through hump day” Wednesday habit and a TGIF fix. The $2.50 a week pleasure has escalated into an indulgence more than double the cost and blew your budget (we won’t mention the health issues). Likewise, in running a small business, you have to count every cost and if you don’t, the costs will run away from you and torpedo your budget as well.
A study of small businesses revealed that employees steal an average of 10 minutes a day from their employers. This is more apt to happen when remote workers use the honor system to fill out handwritten timesheets. You may be aware that this practice occurs in your company, but don’t know how to stop it or maybe you haven’t considered it to be a big deal. It is.
Let’s illustrate…and we will assume that your employees are twice as honest and accurate as the average employee, and you only lose 5 minutes a day amongst each of your 15 employees. At $8 an hour that’s 13.3 cents a minute x 5 minutes a
day =66.5 cents a day per employee. Doing the math…. all 15 employees are taking 75 minutes a day equating to $10 a day, $50 a week, and $2600 a year in overpaid, unearned, non-productive wages. Ouch!
Realizing all the costs can be even more painful!
- A mere 5 minutes a day in timecard inaccuracy results in $2600 a year in overpaid, unearned, non-productive wages.
- Then you must consider the payroll expenses such as workers compensation and payroll taxes associated with these extra unearned wages.
- If the average pay rate is more than $8 an hour, your losses are even greater. You are getting nothing in return for these dollars.
- What’s worse is that you may be cultivating a climate that tolerates dishonesty.
What would you get by utilizing a telephone timekeeping solution that captures accurate time and eliminates the 75 minutes a day waste? Let’s review the savings. In our recent blog article, Control Overtime With Accurate Timekeeping, we calculated that if your 15 employees punch into 2 jobs a day 5 days a week, the monthly cost for accurate timekeeping would be $175 a month or $2100 a year. That 75 minute a day, $2600 a year, payroll loss replaced by the $2100 solution nets at least a $500 savings a year (and possibly upwards of $1000 counting workers compensation and payroll taxes) by capturing accurate time with simple toll-free telephone calls. These savings are probably understated as outlined in a blog article entitled, Would You Trade a Quarter if I Gave You a Dollar?
Then consider other tangibles such as no-show alerts that help to not lose jobs and the seamless QuickBooks Interface that drastically cuts processing payroll time (and makes your bookkeeper happy). Make your life simpler at no net cost to your business. In fact, you make money with an accurate telephone timekeeping service.
Don’t allow inaccurate timekeeping methods to be a money trap for your small business. The costs are real, must be counted and can be avoided. Sidestep into simple with real savings.