Employee time tracking is important, but it can often get frustratingly complicated.Nobody wants to be in the situation where poor time rounding practices have led to employees not being correctly paid or clients being incorrectly charged. We all want to foster positive relationships by making sure everybody gets their due, but there are also legal concerns, as well as the desire to make our administrative work as quick and easy as it can be. Doing it wrong could lead to the unenviable position of having to pay a large settlement amount for poor time rounding practices, and worse can harm the strength of your team and your reputation by creating payment disputes.
What is Time Clock or Time Sheet Rounding?
So, what are we actually talking about here? In a broad sense, time clock rounding is the practice of rounding timesheet entries to certain intervals to make billing and payroll processing a ‘cleaner’ process.For example, it would be incredibly rare for a person to always be clocking in exactly eight hours for their workday.
More likely is the case in which a few minutes are over/under that regular expected time each day. Rather than complicating things by working out exact payments for the extra two minutes over or under here and there, you might implement a time rounding policy whereby you round time entries to the nearest five or ten minute interval, letting you smooth out the numbers to make everything more easily digestible. Many employee time sheet apps will include settings options to allow for automatic rounding of time entries.
Understanding the advantages and disadvantages of employing time clock rounding is vital in knowing you are making well informed decisions about your team’s processes.
Pros and Cons of Time Clock Rounding
We’ve mentioned how using time clock rounding can help to smooth out annoying minute differences in times that are to small to be relevant.It’s much easier to deal with clean numbers in regular intervals rather than messing around with minuscule differences of a few minutes here and there.
But while time rounding can make life easier at the front end, there is always a danger of things working out wrong. When we use time clock rounding, we need to be aware of the potential case in which we wind up not correctly charging a client or paying an employee.
Imagine for example that one of our workers regularly works an extra ten minutes over the expected eight-hour day. Our time rounding practices might cut off this ten minutes to simplify our payroll processing, but the result ends up that, over the course of a week that regular ten minutes adds up to over an hour, and over the course of a few months we’ll end up having underpaid our worker for potentially days of work time that they’ve recorded on their time sheets. What seems like a minor adjustment for the sake of efficiency can quickly add up to a significant amount.
The same situation can come up with charging clients – if we employ rounding practices and round up five minutes here and there to get neat numbers for client billing, we could easily find ourselves in a situation where we’ve either drastically overcharge or undercharged a client. The second scenario hurts our bottom line, the first could potentially have legal ramifications.
What is Time Sheet Compliance and How Can You Comply with the Rules?
It no doubt doesn’t come as much of a shock to know that there are industry standards and legal compliance to meet for time rounding when you realise the potential for mismanagement. Time sheet compliance, put simply, is meeting these industry and legal regulations. Making sure your time recording processes are accurate and within the expectations for what kind of time rounding is acceptable will help to make sure you don’t find yourself in the unfortunate situation of making settlements for poor time clock rounding issues.
Do your research: what is the standard practice within your industry,and will it suit your business? How much impact will changing your current processes have on your team? The right fit for you will take into account the unique situation of your business.
3 Time Rounding Rules Every Business Should Follow
1. Make sure you are rounding in small, reasonable increments
Know and abide by the time rounding regulations for your particular industry/country/business. The best way to avoid overstepping the line is to have clear knowledge of where that line is.
2. Communicate rounding processes clearly with your team
Your team need to understand your rounding process clearly in order to implement it correctly. Make sure your team are fully up to date on all the expectations around their time recording.
3. Keep detailed and accurate time sheet records
If your records are accurate and detailed, you will be able to keep an effective eye on how things are progressing over time and be able to rest assured that your processes are being followed correctly.