Let’s be honest with one another
It’s time to face the facts: honor-based time entry is costing you money. Employees can easily “clock in” when they arrive and “clock out” when they leave, without ever really working the hours for which they are being paid. This not only hurts your bottom line, but also makes it difficult to track time spent on specific projects and tasks. In this blog post, we’ll discuss why honor-based time entry is no longer feasible in today’s business world and how to switch to a more accurate time tracking system.
Most businesses have embraced some form of time tracking, whether it’s an employee punching in when they start working and out when they stop or a more sophisticated system that tracks time spent on specific projects. However, there are still some industries that rely on an honor-based time entry system. In these cases, employees are trusted to accurately report the time they’ve worked each day.
While this system may work in some rare cases, it’s often not the most effective way to track time. Trust is key, but why trust in areas where you don’t have to? Asking employees to punch in and out wouldn’t even cause them to skip a beat, it’s just expected.
Here are 3 reasons why honor-based time entry can cost your money
1. Where is the time actually going?
If you don’t know where the time (money) is actually going, you can’t make proper estimates for new contracts, bill effectively, or even make necessary management decisions to push forward. You’ll get better job costing data if you track time more accurately, which circles back to better decisions and, ultimately, to saving money.
2. Intentional Time fraud
Chances are you’ll find some time fraud if you start tracking time more closely. Time fraud can be found in many forms: Employees who exaggerate the time they’ve worked, employees “buddy punching” for each other, and even supervisors setting up “ghost employees”. This is a huge cost to your business, both in terms of the time that’s wasted and the money that’s needlessly spent.
3. System Led Time Fraud
Although the employee may be entirely innocent, the system in place could lead them to accidentally estimating time. They might also be told to round time up or down to whole numbers for the sake of convivence. For example, have you ever heard of an employee writing down an IN time of 8:12:23 am? Or would they more likely just round to 8:00:00 am instead?
If you don’t think that that time (money) adds up, you may be wrong. If every employee in a 100 employee company rounds 10 minutes per punch you’re losing almost $10,000 each month. Imagine that number with a larger company! Check our math on our time fraud calculator – yes it’s real!
If you’re still using honor-based time entry, it’s time to make a change. Implement a timetracking system that will give you the data you need to run your business effectively. There are many time tracking software options available that can help you get better data and avoid time fraud.
