Time tracking
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Timesheet Errors: How to Stop Losing Time and Money

Timesheet Errors: How to Stop Losing Time and Money

Mistakes are easily made. Everyone’s made one; everyone will make one again. But when it comes to filling out timesheets there’s no room for error. It is a mistake that costs a company valuable time and money.

In the fast pace environment of a business, can you afford that loss? Using an efficient method of time logging can save you time, and money. Not only that but it creates greater confidence within your team. The good news is that it is easier than you think.

What are timesheet errors?

Timesheets are how employees record their time at work. It’s a simple and easy process that ensures that all employees are being paid correctly. With the many different forms of timesheets, there is a wide range of mistakes that can happen.

Different types of employees require different timesheets. Freelancers use timesheets to log workloads or tasks, and full-time employees log hours for each day. That’s a lot of timesheets to be filled out and audited. From calculation errors to basic human mistakes, there are a lot of risks.

Here are some examples of the type of errors that can occur:

Incorrect data entry

This happens when an employee enters the incorrect times into the timesheet. It can happen from an inaccurate clock-in or clock-out time, or when an employee fails to make an entry at all. It results in an incorrect log of time worked, and could show the employee working over or under their contracted hours.

Calculation errors

A very simple mistake that happens more often than you think. One of the most common causes for calculation errors is when a physical timesheet is misread due to poor handwriting. Endless checking up on employees follows where you’re having to create a new timesheet yourself. Lots of time was wasted for everyone involved.

Rounding errors also cause calculation errors. Rounding up or down to the nearest hour to make wage calculation easier makes correct pay much harder. This can lead to a miscalculation of wages, resulting in an inaccurate record of the total hours worked at the end of a week or month.

Time theft

Time theft is when employees have misrepresented the hours they have worked. Employees could extend “hours worked” to include breaks. If an employee logs their breaks, it creates an easy loophole to take a longer break time without making it obvious to management.

It also happens when the clock in and out time isn’t recorded accurately. Employees can be paid for more or less time than they worked, meaning theft from the business or the employee. Both a massive inconvenience that needs to be fixed.

Damaged/Misplaced paper timesheets

Physical timesheets such as a piece of paper or a log book can bring about many mistakes. Employees must ensure they find the timesheet that can be easily moved around the workplace and remember to do this every day and at every break.

This form of timesheet can easily be damaged or lost leading to partial or total miscalculations. One very obvious problem with physical timesheets is simple laziness and forgetfulness. Employees can put off filling out their timesheet for the day knowing it is going to be there tomorrow, risking the likelihood of misrepresentation or forgetting yet again.

What does it all lead to?

Even a small mistake in a timesheet can have a massive fallout. When these errors occur, employees will simply not be paid correctly. Employees and the company can lose money with inaccurate wage calculations.

It damages employee morale and a company’s reputation and it is not an easy mistake to resolve. Here are some examples of the effect timesheet errors can make.

Increased labor cost

When an employee’s hours are not accurately recorded, they are going to be paid the wrong amount. Underpayment causes labor theft from the company and deprives employees of fair compensation for their hard work. Overpayment will damage the company significantly.

Too much money being sent out will cause miscalculations in the company's finances. It risks loss in profits and threatens the company's financial security.

Loss of employer trust

The employee-manager relationship is at risk when timesheet errors occur. If the error is caused by the employee, managers will begin doubting their entries. Managers not trusting their employees is going to have a massive impact on the overall morale of the company.

Employees are going to feel more pressure to be perfect and managers can be overly suspicious and take more things on as a result. Manager and employee mental health will suffer as a result. As simple as timesheet errors are, the emotional fallout is significant.

Everyone deserves to be happy at work. Employee dedication and passion will simply fade in a high-wired and tense environment. No one deserves to work in a place like that.

Loss of employee morale

Wage theft makes employees feel mistreated. It is as blunt as that. It feels like a smack in the face by management that hard work is being unappreciated. Employees will feel like their basic humanity is being ignored and they are reduced to another financial figure to the company.

Hard work is going unnoticed and no one is going to take that lightly. So the employee is going to sink. Their mental health will be affected and their quality of work will falter. If you aren’t being paid properly you are simply not going to put in the same effort.

Decrease in productivity

Timesheets need to be fixed and they need to be fixed urgently. To ensure the employees are being treated correctly and to avoid legal issues (more on this next!), it’s all hands on deck. Admin needs to amend the timesheets to reflect the correct time log.

Employees need to be talked to for the correct record, a risky operation with forgetfulness especially if it’s an old timesheet. Then there is the finance team who must ensure correct payments are processed.

Whilst this must happen, time is being lost. From one error, the whole company can be brought to a stop. Employees have to stop their daily tasks to do this causing overall delays and the waste of time and resources.

Potential legal issues

The underpayment of an employee can result in detrimental legal ramifications for a company. When an employee incorrectly logs their hours, it appears that they worked less than they did. Even if this is an employee's mistake, the employer faces the consequences as they violate the Fair Labor Standards Act (FLSA).

FLSA is in place to protect workers’ rights and ensures all employees are paid fairly. If violated, the company can face lawsuits from the employee for negligence and exploitation of labor. A lengthy and costly process that will reflect badly on the company, affecting reputation and morale.

So how can timesheet errors be minimized?

Timesheet errors are very detrimental. They take their toll both physically and mentally with hours wasted fixing them and it affects morale. But never fear, there is still hope. There are many ways to reduce even the possibility of these risks happening.

Here are some steps to minimize the risk of error:

  • Maintain a regular process for employees to time track. It creates a routine for employees to get into, and everyone loves a routine
  • Use timesheet templates that are easy to use and make total hour calculation easier
  • Use automatic time tracking like Timely to reduce manual entry errors
  • Review and audit timesheets regularly

Applying these, the human and record risks for error are covered. This in turn saves time and boosts productivity in the workplace. Attention can be diverted to where it matters and everyone will be at ease.

Timesheet errors are bad, but it is not the end of the world!

Everyone deserves to be paid correctly. It is a basic employee right. Employees dedicate their hard work and time to a company that deserves to be rewarded. Calculating labor costs is vital to every company's smooth operation so when timesheet errors occur, it is detrimental.

When things go wrong and timesheet errors occur, it causes unnecessary bumps in the road. Because it can be down to both human and record-keeping errors, it is important to protect these aspects of timekeeping. And it is easy to do this.

As long as you:

  • Put in place a dependable system for timekeeping
  • Have your employees use this consistently
  • Put your time tracking system online
  • Review your timesheets regularly

Then you can sit back and relax, knowing that the possibility of errors has been massively reduced. You are not only making sure people are being paid correctly but you are also ensuring trust in the workplace. The relationship between manager and employee will be maintained positively with the stress of being underpaid/overpaid being avoided.

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