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Payroll Sales Pro Issue #33: Justifying Time and Attendance Systems
October 03, 2016

October 3, 2016

Many companies don’t think they can justify the cost of a Time and Attendance system. But if a business employs 20 or more people who are paid hourly, these systems can more than pay for themselves. As you discuss payroll and related services with your payroll prospects and current clients, use this information to help them make informed choices that will benefit their business.

“Time is money.” --Benjamin Franklin

Justifying Time and Attendance Systems

As you consult with your current customers and clients about their payroll needs, the subject of Time and Attendance systems is bound to come up. In the last two issues of Payroll Sales Pro, we have discussed the various options available to companies, and the relative merits of each.

But how do you best approach a company who is not automating their Time and Attendance to give them the proper guidance? Far from just wanting to make another sale (although that’s a great benefit to you), your job is to show the client that it is really in their best interest to look beyond paper time cards and similarly antiquated ways of tracking employee time and make the switch a better option for their specific needs.

Justification for automating Time and Attendance falls into three categories: Accuracy, Lost Productivity, and Potential issues with Labor Disputes.

Let’s take them one at a time.

Accuracy: The American Payroll Association says a typical company will be 92% - 99% accurate in their keying in payroll data. Even assuming a conservative 99% accuracy rate will result in significant savings. Consider the hypothetical example of Company A:

  1. Number of timed employees---------------------- 100
  2. Payroll per pay period (weekly)------------- $48,000
  3. Annual payroll (hourly employees)----- $2,496,000
  4. Annual Accuracy Savings 1%------------- $24,960

This is obviously a decent sized company, but even a company with a quarter of the employees will see significant savings. Couple that with our second point, and you can see the issue (and money lost) increase:

Lost Productivity: Robert Half and Associates and American Payroll Association report that an average of 3 hours and 51 minutes of time is lost per week due to long lunches, long breaks, early punch/late departures, etc. Assuming the hypothetical Company A is only losing 5 minutes per day in lost time the following time and attendance savings would be realized:

  1. Lost productivity per day---------------------- 5 minutes
  2. Average employee’s rate/hour-------------------- $8.00
  3. Average wages overpaid daily per employee---- $.67
  4. Total number of employees (Hourly)---------------- 100
  5. Total wages overpaid weekly----------------------- $335
  6. Annual Lost Time Savings------------------- $17,420

Potential issues with Labor Disputes: Should the Department of Labor audit a company, automated Time and Attendance will carry more authority (and thus prevent many labor disputes) than written paper records. With employees armed with the most current technology, it is in a company's best interest to have automated time and attendance on their side.

For more detailed information about how automating Time and Attendance systems can save companies money, see The Payroll Time Clock Advantage on our site.

And remember we can help you figure out the best approach to solving your clients’ needs in any aspect of the payroll arena.

All it takes to refer payroll is to obtain a payroll invoice from the client, then send it to us and we’ll take it from there. When the client signs up with payroll, you get paid a residual commission for the life of the client.

Remember, PayPros can typically save them 20-25% over what they are currently paying and they will get a dedicated customer service rep that really knows them and the ins and outs of their business.

Ask them for a current invoice, send it to us, and when it closes you get residual commission for the life of the client.

For more detailed payroll Talking Points tips and information, see Payroll Tips and Techniques

Think you’re ready to earn Residual Commission for the life of your clients as a Payroll Referral Rep? Contact us by calling (888) 693-4611 or filling out the form at Best Business Payroll--How to Make Residual Commission

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