Let’s acknowledge that sick feeling you get each time you do payroll with handwritten timesheets. These unmonitored and unverified hours on handwritten timesheets are your #1 business pitfall to avoid and will be the first topic in our new series, Avoid These 8 Major Pitfalls to Succeed In Your Business. Employees are the core of any service-oriented small business and payroll easily eats up 50-70% of the revenue pie. For this reason, your most important task at hand is getting accurate hours for your remote, hourly employees. This pitfall is bad, but how bad can it be?
Handwritten timesheets suck up company profits like a Dyson. First, is the potential for human error (or fraud) on 2 sides of your business. Employees fill out handwritten timesheets and your payroll administrator calculates the hours. Second, is your payroll admin’s time to manually collect, organize, calculate and total every timesheet every pay period. A study by the American Payroll Association found that companies could easily save 4-6% on payroll (or more). Just switch from handwritten timesheets to a virtual time clock. This savings is based solely on the difference between time captured with a virtual clock in, clock out system versus the time written down by employees on timesheets. It doesn’t consider what you pay your payroll admin to handle the timesheets. A switch to an online time clock could easily push the needle to a 10% payroll savings based on these 2 factors alone. If you struggle to pay the bills now, a 10% savings is monumental. We talked to a business owner a few years ago while he was on our 30 day free trial and he made a major discovery. Two of his employees were fudging their timesheets by 30 minutes a day, every day. He immediately let them go.
Businesses must ultimately make money – find an alternative to handwritten timesheets and you lay the foundation for success. By far, the #1 business pitfall to avoid is handwritten timesheets. Put another away, an automated clock in, clock out timekeeping system is the most important tool your service-based business needs. It is the foundational underpinning necessary to avoid the other 7 pitfalls we will discuss over the next few weeks.
Stay tuned and stay in touch by following us on Facebook.