Page 106 - Essentials of Payroll: Management and Accounting

Payr oll Best Practices
large facility or at outlying locations so that employees can conveniently
record their time, no matter where they may be. More advanced clocks
also track the time periods when employees are supposed to arrive and
leave, and require a supervisor’s password for card swipes outside of that

time period; this feature allows for greater control over employee work
hours. Many of these systems also issue absence reports, so that super-
visors can tell who has not shown up for work. Thus, an automated
time clock eliminates much low-end clerical work, while at the same
time providing new management tools for supervisors.
But before purchasing such a clock, you should recognize its limi-
tations.The most important one is cost.This type of clock costs $2,000

to $3,000 each; or they can be leased for several hundred dollars per
month. If several clocks are needed, this can add up to a substantial
investment. Moreover, outlying time clocks that must download their
information to a computer at a distant location require their own phone
lines, which represents an additional monthly payment to the phone
company. There may also be a fee for using the software on the central
computer that summarizes all the incoming payroll information. Given
these costs, typically bar-coded time clocks are used only where there
are so many hourly employees that a significant savings can be seen in

the payroll department resulting from their installation.
Also, employees will lose their swipe cards. To encourage them to
keep their cards in a safe place, the company can charge a small fee for
replacing them.
Another issue to consider is that prior to the use of this type of clock,
hourly employees will have gotten used to paper-based time cards that
have their start and stop times punched onto them.When a bar-coded

time clock is installed,they miss the security of seeing this record of the
hours they worked. Instead, they swipe a card through the clock and
never see any evidence of time worked. To overcome the discomfort

79