Productivity | September 19, 2019

Timesheet Errors: A Major Struggle for Small and Medium Businesses

A recent survey asked 500 small and medium business owners about their experience with timesheets. Surprisingly, 80% of the business owners that were surveyed said that they had serious problems with timesheet errors. 

The term “timesheet error” encompasses a wide variety of issues that business owners face, including human error, time theft, damaged or lost timesheets and many more. The Harvard Business Review estimates that timesheet errors cost the U.S. economy 50 million hours, or $7.4 billion a day, in productivity.

As such, we believe that taking measures to minimize timesheet errors is crucial to the success of any business. Our approach will be to identify a key problem and then address it with a solution immediately. 

Defining The Problem

We have briefly identified some common errors in timesheets. While some are more prevalent than others; they all have a negative impact on the growth of a small and medium business. Therefore, we will be exploring each problem in more detail.

The Problem: Human Error

As much as we would like to believe that we are perfect, the fact is that we aren't. Human error is one of the biggest issues not only with timesheets but also with many other processes within a business. Even smaller mistakes like reversing numbers or adding wrong can lead to financial issues. Now add breaks, overtime, paid-time-off (PTO), vacations on top of the work hours, and you got yourself a problem.

According to the Americal Payroll Association (APA), “errors resulting from manual processing of time and attendance alone can account for 1%–7% of total payroll costs”.

The Solution to Human Error

Let’s face it, manual time tracking methodologies are outdated, inaccurate and costly to our businesses. New business processes are being automated on a daily basis, and do you know why? So that business owners can start focusing on important business tasks, and employees can stop wasting time across unproductive tasks. Digital time tracking tools are widely available, each with its own specialty. These tools have changed the way businesses operate for the better. Unlike humans, algorithms are tailored for accuracy. This means that a digital time tracker is less inclined to make mistakes when measuring the work hours of employees. 

How do these time tracking tools work?

It really depends on the nature of the tool. However, most of the popular time trackers follow a similar pattern. Users log into their profile, just like they would for Facebook, and they are requested to punch a clock-in button. Upon clicking the button, a timer will start running - which highlights the time the employee has spent working. At the end of the day, the employee will repeat the process to clock-out and the data will be automatically be archived for later retrieval.

What is great about these tools is that they are eliminating most of the timesheet errors that we have highlighted above. Hence, with regard to human errors, a digital time tracker will work like a charm. You, your managers, and even bookkeepers won't have to be crunching numbers for hours in hopes of accurately measuring the productivity of your employees. With a digital time tracker, all of that work will be done automatically and accurately.

The Problem: Time Theft

Have you ever heard of the term “buddy punching”? 

Buddy punching describes common behavior among employees, namely the employee's ability to clock someone in and out of the system without them being there. Assume two of your employees are Jane and Jackson. These two are great friends, one is disciplined and prompt while the other is laid-back and always late for work. Let’s make Jane the disciplined employee and Jackson the tardy one. One day, Jackson asks Jane to clock in for him because yet again he is late. What are friends for? Buddy punching one another clocks at work - at least thats what they believe.

Buddy punching is simply one of the many forms of time theft and it is especially prevalent across medium-sized businesses that manage work hours using manual systems.  Another study by the American Payroll Association reported that more than 75 percent of companies lose money from buddy punching.

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Now, how does time theft relate to timesheet errors?

Falsifying time and attendance will negatively influence the end result which is the timesheet. Going back to the “Jane and Jackson” example, we see Jane falsifying the attendance of Jackson. If the business owner, manager, bookkeeper or any other relevant individual represents that data in a timesheet then an error has been made. Jackson is now being paid for hours that he has never inputted. As a result, the company will be losing money - which relates to our initial conversation about timesheet errors and their costs to businesses.

The Solution to Time Theft

What if you could have an account of every individual and only they and the manager would have the ability to clock them in or out of the system?

Well, pack your punch clocks and paper timesheets and get ready to automate your time tracking and reporting system at once. Initially, process automation was a feature only large businesses could afford; However, with time, developers have started to introduce affordable digital time clocks that can be purchased from small and medium businesses too.

Digital time clocks have an innate feature that allows you, the system administrator, to set a unique ID for your employees. This way, prior to clocking in for work the employees have to log in to their personal account and then punch the clock. But, what if the employee shares his/her credentials to co-workers so that they can clock in for them?

Digital solutions aren’t perfect either. There are loopholes that can be misused by employees even in this realm. However, there is a solution to this problem. Certain developers have made their digital time clocks compatible with mobile devices - both iOS and Android. Moreover, they have included a specific functionality called location tracking that monitors the location of the employees from the moment they clock in until the moment that they clock out. 

Once again, let's go back to the example, if Jane were to clock Jackson in, she would not only have to change location from where she clocked in - just to avoid overlap - but also have Jackson's phone. Under such circumstances, time theft doesn't make sense. 

Reducing time theft will substantially boost your companies performance and reduce its costs. Therefore, start thinking of ways you can implement a digital time clock from today.

The Problem: Damaged or Lost Timesheets

When managing a team of 20+ people, it is easy to lose or damage timesheets while collecting them. Upssss... you spilled coffee on your paper timesheets that were laying on your desk or you forgot your timesheets somewhere in the office and the cleaning lady threw them away!

That's unfortunate, but its something that happens to small and medium owners all the time. When these situations happen, employees will have to recalculate their hours from memory.

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What do you think are the odds of them making mistakes when calculating a full month? 100%. Unless your employees have a photographic memory, the odds of them accurately recalculating their work hours is 0. There you go, another timesheet error for us to solve!

The Solution to Damaged or Lost Timesheets

How can there be damaged or lost timesheets when everything is stored in the cloud?

For those who don't understand cloud storage, here is a simple explanation to have you understand the concept:

“Cloud storage involves stashing data on hardware in a remote physical location, which can be accessed from any device via the internet. Clients send files to a data server maintained by a cloud provider instead of (or as well as) storing it on their own hard drives. Google Drive, which lets users store and share files, is a good example”

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When using digital time clocks, data is automatically archived in the cloud and it can easily get accessed via timesheet reports that are created by the time tracking software. Unless someone manually deletes the archived data, damaged or lost timesheets will not happen.

The timesheet errors we have highlighted so far present only a few of the many problems that small and medium businesses are faced with. However, we have provided enough evidence to help you understand the relevance of time tracking automation and how it can save you time and money.

No more wasting countless hours gathering and calculating timesheets. Start focusing more on strategy and less on pesky timesheets. 

As a starter, we suggest that you start by researching various digital time trackers and what they offer to their users. 

The atto blog is a great resource for you to get a better understanding of how time trackers work and what solutions they offer. Head on over to the blog page and explore the multiple articles we have prepared for you!


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Atto is the simplest timesheet app for small and medium-sized businesses. It’s intuitive interface and carefully designed features, including time tracking, location tracking, team insights and automated timesheets help employees and managers focus on real work.

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