Web-based systems reduce payroll costs

Whether companies manage payroll internally or by outsourcing, Web-based timecards can help employers meet the ever-growing challenges of handling payroll.

Because Web-based timekeeping systems are housed on the Internet, there is no software to download or maintain on the company’s computers. An employee clocks in by accessing a Web site and clocks out through the same site. Since the computer tracks date and time information, opportunities for fraud are reduced. Remote access can be helpful for employees who travel or work in multiple locations. This technology also assists employers who allow employees to telecommute or provide other alternative work arrangements as an employee benefit. Systems can be established to allow an employee to clock in from any computer, from one computer or to automatically clock a user in when they log into their computer. The Web-based system tracks the employee’s work time as well as time off, such as vacation, sick time and personal time.

Security features can be customized to meet a particular employer’s needs. Since security features reduce fraud, employers don’t have to worry about paying employees for time they did not work or worry that someone other than the employee is clocking in for them. Web-based systems also allow supervisors to approve an employee’s time card prior to its payment.

Web systems allow employees to view how much time off they have remaining, verify their timecard and wages prior to submitting it for payment, view their benefits and deductions, and print prior pay stubs or W-2’s. Information related to an employee’s work history and pay is available to employees when they need it.

Web-based timekeeping systems reduce an employer’s cost of doing business in two ways.

First, they create a seamless transfer of information from the timekeeping system to the payroll system. Manual entry of time is no longer necessary, saving expense and potential for error. More sophisticated Web-based time entry systems also allow the timekeeping and payroll system to interface with the general ledger or QuickBooks to further eliminate double-keying and the associated personnel costs.

Second, Web-based systems can prevent a company from having to designate personnel to answer these types of questions or retrieve this information, allowing them to focus on more profitable tasks. When an internal human resources or payroll department does exist, the availability of this information directly to the employee allows those departments to turn their attention to other business.

Web-based systems also allow employers to easily generate reports to eliminate or reduce employee overtime, to determine the efficiency of a specific employee, to calculate the amount of time spent on certain jobs, task or clients, or to determine how much the company spent for certain paid time off, such as sick days.

Most systems also provide remote entry pads for areas that do not have Internet access. The entries into the remote pads are transmitted electronically to the payroll system the same as Internet entries.

When evaluating Web-based time entry systems, there are many factors to consider. Because there are so many products (and potential problems), make sure you thoroughly evaluate any Web-based time tracking system. Questions to answer:

• Is the company reputable and in the business of providing payroll services? Can they be available to partner with you to resolve concerns and service your business? Can they provide references?

• Will the time-keeping system integrate seamlessly with your existing payroll system? Would it make more sense to outsource your payroll system?

• Does the time-keeping system have sufficient security measures to prevent fraud and misuse?

• Does the time-keeping system also track time off and employee benefits?

• Does the system allow your company to provide expanded services in the future (integrate with other systems, allow future integration with benefit management plans)?

• Does the system allow sufficient customization to meet your specific needs and business practices (rounding rules, reporting, accessibility, verification process, etc.)?

• Does it generate useful reports easily?

Personnel represents one of the largest costs of any business. Web-based time tracking systems can help businesses better track and manage personnel costs by increasing the efficiency of the payroll system and providing better information to employees.

Jeff Hunter is president of The Payroll Co.