Choosing a Time and Attendance System

What are time and attendance systems?

Time and attendance systems allow employees to clock in and out electronically via timeclocks, internet-connected computers, mobile devices and telephones. Some solutions also offer the ability to punch in and out via text messages, social media programs like Twitter, and other communication programs, such as Slack. When an employee clocks in or out, the data instantly transfers to software that can seamlessly import it to your payroll solution.

These systems do more than just track when employees come and go. They also monitor mobile employees via geolocation and geofencing, manage paid time off (PTO), create employee schedules, provide detailed labor reports, and give real-time data on who is working, who is not, who showed up late and who is nearing overtime.  

Time and attendance systems offer self-service that allows employees to handle many time-tracking tasks on their own, such as reviewing the hours they’ve worked, their current and future schedules, and their PTO accruals.

Many of these systems offer both cloud-based and on-premises solutions. The on-premises systems are stored on servers within your business, while the cloud-based systems are housed by your time and attendance system provider and accessed online.

Types of time and attendance systems

Given their breadth of functions, it should come as no surprise that there are various types of time and attendance systems. When comparing your options, you’ll probably encounter the following types of systems:

• Timecard: The timecard option is basically the classic mechanical punch clock gone digital. When you install a timecard system, you’ll give your employees a timecard that closely resembles a credit card. These cards automate time tracking, but just as with physical timesheets, there’s nothing stopping employees from swiping each other’s cards to cover for absent or tardy co-workers.
• Proximity cards, badges and key fobs: Instead of making you swipe a card, these time and attendance tracking options rely on readers that scan identifying cards, badges or key fobs within a certain distance. Many of these time and attendance tracking options aren’t just for clocking in and out – they can also track your employees’ movements within your workplace.
• Biometric: With biometric time and attendance systems, you’ll know exactly who’s swiping in and out of your office. These high-tech time and attendance tracking systems use facial recognition, fingerprints, eye scanning, and other biological identifiers unique to one person to ensure that the person clocking in is actually the person working. Of course, you’ll pay more for these high-end features, but with your extra spending comes nearly foolproof time and attendance tracking.

• Web-based login: If your employees work remotely, you’re probably wondering how any of the above solutions could work for your company. That’s why web-based login stations exist. You can implement these systems so that your employees can sign in from their laptops, personal computers or mobile devices no matter where they are. Our review of QuickBooks Time outlines why this time and attendance system is excellent for mobile workforces.
• Interactive voice response: Another solution for remote employees, an interactive voice response (IVR) tool is a system through which remote or field employees clock in via phone call.

Pros and cons of time and attendance systems

Pros of time and attendance systems

These are some of the benefits of time and attendance systems:

• No manual timecards. The biggest benefit of digital time and attendance tracking systems is that they eliminate the need for manual timecards. All the time is collected electronically, with the calculations made for you. 
• Less human error. Since time and attendance software systems are automated, they cut down on the chance of human errors in calculations of labor and job costing. They also free up the person who was responsible for your time and attendance tracking before to work on other tasks. Additionally, with fewer errors comes lower risk of noncompliance with labor laws and regulations. 
• More efficient time tracking. Another positive is that these systems manage all your time needs – employee attendance, PTO and employee scheduling – in one program. This can be both cost-effective and a boost to productivity, as employees won’t waste time toggling between different programs to ask for time off or look at their schedules.
• More accurate payroll processing. With time and attendance software, you don’t have to round the hours your employees worked to more convenient numbers that work better with your payroll calculations and pay rules. Your software of choice will automate – and ensure the accuracy of – all your payments.
• Extensive integration. Most time and attendance tracking software platforms integrate with many other human resources tools, so they improve all your workforce management tasks, not just your attendance-related processes.

Cons of time and attendance systems

These are the main pitfalls of time and attendance systems:

• Cost. The biggest drawback of time-tracking systems is that they are more expensive than the manual method where employees write down their hours each day or punch in and out on a paper timecard.
• Errors. Even the best software programs may occasionally glitch. There’s always a mild risk of tracking or calculation errors when you use any software – time and attendance systems included.

Costs

The cost structure of time and attendance systems depends on whether you choose a cloud-based or on-premises solution. Cloud-based systems have smaller recurring monthly costs, while on-premises systems typically have larger one-time fees.

With on-premises systems, you pay all your costs upfront. You can expect to pay several hundred to several thousand dollars for the software, licenses for each employee, and installation. There are no monthly fees for the service thereafter. However, the one-time costs don’t typically cover any ongoing support or software updates.

For a cloud-based system, most services charge a per-employee fee that ranges from $1 to $10 per month. Some cloud services also charge a base or minimum monthly fee.

Some providers charge a one-time setup and implementation fee. Unlike with on-premises systems, however, all software upgrades and support are included in your monthly expenses.

Another cost you might incur for either option is for a timeclock. Many time and attendance systems work with a range of timeclocks. These timeclocks can work with PINs, swipe or proximity badges, or biometrics such as fingerprint or facial scans. The complexity of the clock you select will determine the cost. Prices usually range from a couple hundred dollars for a basic clock to several thousand for a sophisticated biometric clock.

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What to look for in a time and attendance system

With so many systems on the market, it can be difficult to know which one is right for your business. When shopping for a system, you should look for several things.

• Flexible time-tracking options: Look for a system that allows employees to record their hours in multiple ways, such as through an internet-connected computer, smartphone, tablet, timeclock, telephone or text messages.
• Accurate timekeeping: Good time and attendance systems ensure companies pay their employees for the actual time they work, not the hours they’re scheduled to work.  
• Tracking for all time issues: Choose a system that takes care of all your time-related needs, not one that just allows employees to punch in and out. This includes employee scheduling and PTO management functions. In addition, if your company charges clients based on time, you may want a system that offers job-tracking logs to determine how long your employees work on specific projects.
• Mobile compatibility: Since many employees and managers now work outside the office, you want a system that is compatible with mobile devices so it is accessible from anywhere. This includes solutions that not only give your remote workers the ability to clock in and out, but also track their locations so you know they’re working where they’re supposed to be. Geotechnology can be extremely valuable to restrict where employees can clock in and out from or to record the exact locations where they start and end their shifts.
• Ease of use: Search for a system that is easy to use, has an uncluttered interface, and allows employee self-service. The system should not be hard to learn and certainly shouldn’t require hours of training.
• Integrations: Choose a system that integrates with the applications and software that you already use, such as your HR and payroll programs. 
• Proactive alerts: Some systems provide notifications when employees are nearing overtime or forget to clock in or out. This can be helpful in controlling expenses.
• Audit trail features: The ability to view original timesheet data, along with any changes made by a manager or supervisor, can be important in case of an audit.

Time and attendance FAQs

Still have questions about time and attendance systems? Here are some common questions and answers that may help you reach a decision. 

How are time and attendance systems different from traditional timeclocks and timecards?

The biggest difference is that everything is digitized and automated. Traditional timeclocks and timecards require manual entry of data for everything. Time and attendance systems just require the push of a button for all of the information to sync with your software. That software then seamlessly integrates with your payroll solution. This eliminates duplicate entries and guesswork. In addition, time and attendance systems log hours, job codes, and information about breaks and PTO digitally and in real time.

What types of timeclocks are compatible with time and attendance systems?

No longer are there simple punch timeclocks. Today’s timeclocks collect time in several different ways, including via punch cards, magnetic swipe cards, barcodes, PINs, and biometrics such as fingerprints or facial scans.

Is there a difference between a time and attendance system and a biometric system?

Any time and attendance system that works with a biometric timeclock is a biometric system. Because nearly every time and attendance solution that works with physical timeclocks offers biometric options, there is very little difference between the two. Biometric timeclocks are best to use if you are concerned about buddy punching.

The only time and attendance systems that don’t have biometric options are those that don’t incorporate biometric timeclocks, relying instead on computers and mobile devices to punch employees in and out. However, even some of those systems now offer fingerprint scanners that plug into computers or use programs that take employee pictures with a computer camera as a way to incorporate biometric options.

Do you have to use a timeclock with a time and attendance system?

No. Some businesses prefer employees to clock in and out only through a computer, mobile app or telephone. Not using a timeclock can cut down on costs, as they can run anywhere from a couple hundred to several thousand dollars each.

Are time and attendance systems only good for businesses with hourly employees?

While it might seem like time and attendance systems are only necessary for businesses with hourly workers, businesses with salaried employees can reap a number of benefits from them as well. A system that tracks how long employees work on specific projects can help with labor projections. Additionally, businesses with salaried employees may appreciate the PTO management aspects of the system.

How do time and attendance systems work for remote employees?

These systems use GPS technology to monitor remote employees via mobile devices. Some systems use geofencing to limit where employees can clock in and out from, while others use geolocation to record exactly where workers are when they punch in and out. The systems can also use geolocation to track employees throughout the day, not just where they start and end their shifts.

How do time and attendance systems integrate with payroll systems?

Time and attendance systems integrate with payroll systems by allowing you to transfer your time and attendance data into your payroll program with the press of a button. This cuts down on errors and streamlines the entire payroll process.

How do time and attendance systems manage paid time off?

Time and attendance systems manage PTO in several ways. They can track how much time off employees have earned and used, as well as accruals for sick time, vacation, bereavement and any other type of time off employees may receive.

Some time and attendance systems also handle the request and approval process. This allows employees to ask for time off directly within the system, and managers can either approve or deny those requests.

Max Freedman contributed to the writing and research in this article.