Payroll timesheets are essential for businesses with nonexempt employees who are entitled to receive overtime. If workers log their time incorrectly or past due, it can negatively affect their pay, create liability and harm the organization’s financial health. Such consequences are not always the result of employee behavior, though. The inherent problem might be the time-tracking system itself. Employers who still rely on paper timesheets and tedious data entry may want to explore automated timekeeping solutions.

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What is a payroll timesheet?

A timesheet is a method of tracking the number of hours an employee works in order to process payroll. Common examples include paper templates and digital, file-based programs, like Word documents and Excel spreadsheets. Many employers have abandoned these manual timekeeping methods in favor of automated solutions, which can more effectively track time and calculate overtime hours.

Pros and cons of using manual payroll timesheet templates

Payroll timesheets are an integral part of the payroll cycle. They help employers pay their employees accurately and on time.

However, manual timesheets pose several drawbacks for businesses:

  • Paper timesheets can be lost
  • Employees may incorrectly record their hours or forget to log them altogether
  • Time spent filling out and submitting timesheets diminishes productivity
  • Manual data entry increases the risk of costly errors

How to automate time tracking

Automating time tracking is easy with a time and attendance solution. Employees using the software log their hours in real time, so the data is more accurate and available to supervisors immediately. Incorporating time clocks or mobile apps further increases accuracy because employees simply clock in and out. Their hours are recorded and automatically transferred to a payroll system.

An automated timekeeping solution can also track infractions according to specific attendance policies. As a result, employers have greater awareness of potential issues and can address them before they become more significant problems.

Additional time-tracking methods

Timekeeping solutions give employers flexible time-tracking options. They may be compatible with traditional time clocks, smart time clocks, point of sale (POS) devices and mobile devices.

Smart time clocks

Smart time clocks provide an easy and secure way for employees to submit their time. A PIN or badge number is usually required. In some cases, the time clock may use facial recognition or fingerprint scans for added protection against time theft. Once employees record their time, it’s sent directly to the payroll system, reducing errors and saving time.

Time clock apps

Downloadable time-tracking apps can turn a shared tablet into a virtual time clock for teams of employees. Facial recognition and fingerprint scanning, if available, help prevent workers from clocking in or out on behalf of someone else – also known as buddy punching.

Mobile solutions

Some time and attendance providers offer solutions that allow employees to record time on a mobile device. In such cases, employers may use geo-pinning or fencing to know where workers are clocking from.

Frequently asked questions about timesheet and payroll software

How do I keep track of my employees' time?

Time and attendance software is generally recognized as the most precise method to track employee hours worked, sick days, vacation time and other leave time. Most solutions are flexible, allowing workers to log their time via traditional time clocks, smart time clocks, computers and mobile devices.

How do I choose the right timesheet approach for my business?

Choosing the right time tracking method, whether it’s a traditional timesheet template or a time and attendance solution, ultimately depends on an organization’s pay policy needs. Employers may want to consider their business’s size, industry, workforce attributes, work locations and strategic goals.

Are there any legal implications associated with timesheets?

Yes, employee time tracking is an essential part of complying with state and federal labor laws and collective bargaining agreements with unions.

This guide is intended to be used as a starting point in analyzing timesheet payroll and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.

Jim McGeady, Senior Director, Product Marketing, ADP

Jim McGeady Senior Director, Product Marketing, ADP Jim McGeady has more than 25 years of experience helping organizations around the world drive business results through the optimal management of their people.