The Best Time and Attendance Systems of 2021

• Time and attendance systems digitize the process of tracking when employees start and end their shifts.
• These systems offer mobile apps and remote clock-in options for a distributed or remote workforce.
• Time and attendance systems offer workforce reports and exports that provide data to your payroll system.
• This article is for small business owners and HR professionals who are considering implementing time and attendance software to better track employee hours.

Time and attendance systems track how long employees work each day. The best solutions are easy to use, give employees multiple ways to clock in and out, manage paid time off (PTO), and easily integrate with your payroll service. To find the best time and attendance systems for small businesses, we evaluated several systems based on a number of factors, including cost, ease of use, integration options and valuable features.

There are two common pricing models for time and attendance software: cloud subscriptions and on-premises licenses. You typically pay a monthly fee for cloud-hosted subscription services based on how many employees (or users) you have. Some time and attendance solutions are on-premises systems that you download and store on your computer; for those systems, you generally pay a one-time licensing fee.

Cloud-hosted time and attendance software typically costs $2 to $10 per month for each employee. Some providers also charge a monthly base fee. Other add-on charges may include fees for installation or setup. Support fees are typically included in your monthly subscription price.

If you choose a timekeeping system that you download to a computer and host on your network, your costs will range from $100 to $400 per license. Plus, you'll have to purchase computers and, in some cases, a physical time clock. In general, you'll also have to pay an annual fee if you need technical support after your installation period ends.

Key takeaway: Cloud-hosted time and attendance systems typically cost $2 to $10 per employee per month, and on-premises systems cost $100 to $400 per license.

Time and attendance systems replace outdated wall-mounted time clocks, paper timesheets, and confusing spreadsheets. They provide an easy, accurate way for employees to clock in and out. All time and attendance systems offer configurable timesheet reports that you can export to your payroll system, and most include useful features such as workflow automations, team communications, and reminders.

Here is a rundown of the many features time and attendance systems offer:

• Time reporting: Modern timekeeping systems can interface with existing time clocks, or you can let employees clock in and out through a web browser or mobile app. Some systems let workers clock in and out by phone, or even via Apple Watch, social media, text message, or Slack. Most let you set up rules for when employees can clock in and out, and automatically calculate overtime. Some simplify time tracking for teams that work the same hours.
  
  
• Biometrics: To prevent buddy punching, some time and attendance systems require workers to input a code, badge, fingerprint or photo when they clock in or out. This system confirms that you pay only for time your employees worked and that you're paying each worker correctly.
  
  
• GPS tracking: In addition to letting employees clock in and out from their mobile devices, many time and attendance apps include geotechnology. For example, geofencing lets you set specific coordinates from which your employees can punch in and out, ensuring that each employee is at the job site when they sign in. Another option is geolocation, which periodically records an employee's GPS coordinates or when an employee punches in or out. You can review those coordinates to make sure the employee was where they were supposed to be throughout the day.
  
  
• Employee scheduling: Many time and attendance systems have built-in scheduling tools. You can create employee schedules for workdays, hours, appointments and shifts. Many also include drag-and-drop functions and scheduling templates that you can reuse from week to week.
• PTO management: Most time and attendance systems allow you to log accruals for sick time, vacation time, and other types of paid and unpaid time off, like FMLA, jury duty, and bereavement. Most also let employees request time off directly within the software, and managers can either approve or deny those requests.
  
  
• Calendars: Some software comes with calendar functions that allow your employees to visualize their tasks and locations for each day. You can also sync your time and attendance software with third-party calendars, like Outlook or Google Calendar, to keep all your meetings, projects and jobs on one platform.
  
  
• Messaging: Many solutions come with messaging features that allow your employees and managers to communicate directly within the platform. These messaging features are often user-friendly, and they give your team an easy way to stay in touch on important topics regarding time and attendance.
• Job and project tracking: Some systems log employee time on a specific project or task. This is a valuable tool for businesses that bill clients for their employees' time spent on project work and client tasks.
  
  
• Invoicing: While this is less common, some time and attendance systems give you the ability to issue invoices. After the software tracks how much time your employees spend on a project, they can combine that with your hourly rates to automatically issue accurate invoices to your clients.
  
  
• Alerts: Some time and attendance systems can notify you when your employees have clocked in or out for the day. They can also remind employees to clock out and let you know when an employee is about to work overtime.
  
  
• Labor reports: Most systems provide reports detailing workers' hours, wages, and schedules, and some offer advanced reports, like labor costing.
  
  
• Integrations: Most time and attendance systems integrate with your payroll service via CSV or a software interface. These integrations save time when you run payroll by ensuring that overtime calculations and time-off deductions are correct in your payroll system. Some providers even offer payroll processing as a service within their platforms so that you can double up on your HR functions.
  
  
• Dashboard: Some systems include a digital dashboard that gives you an overview of which employees are punched in and out. Employees can access a self-service dashboard that lets them manage their time and attendance data from a web browser or mobile device.
  
  
• Configurations: Most time and attendance software enables you to set up your own scheduling rules, swap shifts, round up time and pay for breaks.

Tip: Before comparing time and attendance systems, identify which features you need. Some companies offer all these features bundled together, whereas others offer them on an a la carte basis.

A timekeeping system, if set up and used properly, will save your business money. When you use time and attendance software, your employees can no longer round up the hours they've worked or punch in for their friends; instead, the software documents their work hours. Most timekeeping tools also include scheduling software so you can determine exactly when you want employees to work.

Here are some other benefits of using time and attendance software:

1. It helps ensure accuracy and compliance.

A time and attendance system eliminates manual recordkeeping, which reduces errors. In addition, you can more easily demonstrate your business's compliance with overtime tracking rules and other labor laws.

2. It saves your HR staff time.

Time and attendance software saves your managers and HR staff time they would have otherwise spent tallying employees' work hours and transferring the information to a payroll software program. This frees up your back-office team and supervisors to focus on other business tasks.

Did you know? It can take up to six or seven minutes to add up each employee's timecard.

3. It gives your employees scheduling and attendance insights.

Time and attendance systems benefit employees who can see their work schedules in advance; they'll recognize they're being paid for all of their time worked. Most time and attendance systems are easy to use, as employees clock in using their computer or mobile device. These systems also show employees details like their total hours worked, weekly schedules, and time-off accruals and requests.

Do you need new time and attendance software?

If you are still using paper timesheets or a traditional punch clock, your business will benefit from a digital time and attendance system. First off, it reduces the chances of time-related errors in your payroll. Most of these systems integrate with payroll by uploading the timesheet data into your payroll program. No one has to manually calculate time punches and reenter them into the payroll software – a process that's more likely to result in errors.

Time and attendance systems allow businesses to create electronic schedules, manage PTO, and store employees' schedules, work hours, break time, time off, overtime, and paid hours in one place. That means you'll no longer need to dig for data in paper files when an employee or your payroll provider has a question.

How can time and attendance software save you money?

You may pay $2 to $10 per employee per month for a time and attendance system, but the savings you get in return can far outweigh the cost.

Businesses can save money with a digital time and attendance system by eliminating inaccurate clock-in and clock-out times. For example, with manual timekeeping, an employee might round up their clock-out time from 4:50 to 5 p.m., or round down their lunch break from 40 minutes to 30. Time and attendance systems eliminate this type of punch rounding and ensure that employees are paid only for when they actually work.

Time and attendance software also saves you money by:

• Reducing the paid hours that managers, admins or HR staff spend on gathering and calculating timecards
• Decreasing manual data entry errors that result in time spent fixing payments
• Reducing the risk of labor-law fines and back pay, which are common when employee time isn't calculated and paid correctly

What should you expect time and attendance systems to do?

You should expect your time and attendance system to handle all your hourly and salaried employees' time-tracking needs, including overtime.

At the very least, look for a timekeeping solution that offers multiple ways to clock in and out, gives remote workers the ability to punch in and out from wherever they are, and integrates with the payroll software you use. Other useful features include the ability to generate and assign employee schedules, manage PTO tracking and approvals, log how long employees work on specific projects, and monitor where your remote employees are clocking in and out from each day.

How does an employee time clock work?

An employee time clock provides a record of when an employee works. With traditional punch clocks, an employee inserts a paper timecard into the machine, which records on the card what time the employee clocked in or out.

Digital time clocks (computers, kiosks and mobile devices) record the clock-in and clock-out times directly in the time and attendance software, using a secure method to avoid time theft. Examples are a login ID, PIN, swipe card or biometrics (such as fingerprint, photo or facial scans).

How does employee time tracking integrate with payroll and HR?

Employee time tracking is an input for payroll, especially for employees who are paid by the hour. To pay your workers properly, you need to know how many hours they work each day, week and pay period.

The best time and attendance systems integrate with your payroll and HR software, either by uploading a CSV file or automatically transferring timesheet data through a digital interface. This process saves time and cuts down on errors in transferring work hours from one program to another.

Why is it important to clock in and out at work?

The biggest benefit of employees clocking in and out is ensuring that you pay employees for all hours they work, in compliance with federal and state labor laws. Similarly, you don't want to pay employees for time they aren't working. A digital time and attendance system gives employers precise details on when employees are working and when they aren't.

Biometric time clocks, which make employees punch in and out with a fingerprint or retinal scan, also prevent buddy punching. In other words, they ensure employees clock in themselves rather than having someone else do it for them. If not curbed, buddy punching can cost your business money and reduce productivity and morale.

Accurate timekeeping also gives employers a better handle on staffing needs. With time and attendance software, you can compare employees' schedules with the busiest days and times for your business and adjust staffing levels accordingly.

How are time and attendance managed with a PEO?

As a co-employer, a professional employer organization (PEO) will require you to manage employee time and attendance according to labor laws. Therefore, they'll likely provide a time and attendance app that lives on the same platform as other HR functions, like payroll and benefits administration.

For example, when an employee records their time for the day, that data automatically populates in the software, saving you from duplicate data entry that could lead to payroll errors.

Why is it important to document employee time and attendance?

A time and attendance system can save your business money, improve team productivity, and aid in legal compliance, because the time records serve as a legal document and must be kept for a minimum of two years in most states.

An accurate log of when employees are – and aren't – working ensures that each staff member is onsite when they're supposed to be and being paid only for the hours they work. In addition, having a record of the hours that employees have worked helps employers optimize their staffing levels so they are not under- or overstaffed. This is especially important for service businesses like restaurants and retailers.

Time and attendance reports can also serve as proof that your business is following the appropriate employment and labor laws – for example, adhering to youth attendance laws, paying overtime, and tracking mandatory paid rest breaks and unpaid meal breaks.

What is a reasonable attendance policy?

Some organizations need strict attendance policies to function properly, while others may offer flexible work schedules. Most employers require workers to call in when they are going to be late or miss work. Many document each tardy occurrence, and some terminate employees who fail to show up for work after one, two or three days.

According to the U.S. Bureau of Labor Statistics, the average full-time worker misses almost three days per year. In some industries, such as service occupations, the absence rate is higher. When drafting your company's attendance policy, consider your industry and your company culture as well as the demands of the business.

For example, one employer may find it acceptable for an office worker to be 30 minutes late to their shift because their work schedule is flexible. On the other hand, a manufacturer or retailer may not tolerate such tardiness or an unauthorized absence because it may affect the business's ability to function.

Once you've created your company's attendance policy, you should meet with your employees to review the policy and ensure they understand what is expected of them.

Artificial intelligence (AI) will integrate further with time and attendance systems in 2021, collecting and analyzing employee data to provide information to employers to assist them with staffing, scheduling and other labor needs. 

Employers can also expect more self-service capabilities. With so many working remotely now, companies are looking for tools that allow employees to access their work schedules and accurately self-record the hours they work, paid time off and sick leave. In industries with unpredictable or continuously changing schedules, employees especially need systems that provide timely alerts.

The increased use of chatbots, which are powered by AI, will further streamline the time management process for employers and employees. Instead of employees turning to their managers or HR with questions about their timesheets or time-off requests, they'll be able to ask and get instant answers from their time and attendance systems' built-in chatbots. 

Current coronavirus precautionary measures are also affecting HR procedures and how time and attendance systems are used, specifically clocking in and out. The New York Police Department has banned biometric timeclocks as a precaution to reduce the spread of COVID-19 among its ranks.

As the virus continues to spread, and until a vaccine is more widely available, it's expected that businesses worldwide will follow suit and use other options for clocking in and out, like facial recognition or contactless scanners. It is still not yet known whether or not businesses will revert to using these types of timeclocks as the threat of coronavirus subsides.

Another trend shaping time and attendance solutions is the gig economy. This fast-growing set of workers is governed by a different set of laws and regulations than permanent employees. Employers must pay attention to how these regulations evolve so they can accurately track hours worked and pay freelance workers.