If you pay employees by the hour, then you need a time clock. In this guide, I'll explain what to look for and why.
Typically, choosing an employee time clock is a task for small business owners, human resources managers, payroll providers, PEO firms, or staffing agencies. Whatever your role, I hope this helps your search. Whether you have one employee, thousands over many locations, or anything in-between.
Why use a time clock?
Beyond recording employee hours, consider the benefits:
Promote fairness. Using a machine or software takes away any personal bias. Nobody has any special advantages or favors. Everyone is treated equally.
Keep employees honest. If an employee clocks in late, then they are late. An indisputable record is now etched on their timesheet to prove it. There may be excuses, but that's a different story.
Know if employees are working or not. Look at their timesheets. Are they clocked in? Some systems have status reports showing the employee's location and what job they are working on.
Reduce administrative costs. This can vary depending on what kind of time clock. But even a basic clock that prints on a time card is more efficient than writing on paper. Clocks that calculate hours can save an hours of time.
Reduce payroll errors. With a completed timesheet, and assuming the approval of both the employee and supervisor, payroll can safely be run. And if the time clock allows data transfer, then human error will be reduced if not eliminated.
Help with compliance. Straight out of the Fair Labor Standards Act (FLSA) guidelines: "The FLSA requires employers to keep records on wages, hours, and other items, as specified in DOL record keeping regulations." Exactly what time clocks are designed to do.
Types of time clocks
There have been many varieties over the years. But to narrow it down, I'll focus on three basic types prevalent today.
1. Time clock machines
The traditional time clock. Machines with a clock face and mechanism to print a time stamp onto a paper time card. They stand alone with no need for software or network connections.
Here are a few types...
Mechanical time clocks: Traditional, but almost extinct. These time clocks used a mechanical type wheel that hammered through an ink ribbon onto a time card. Making a loud, "ka chunk" sound. It's where the term "punch" clock came from.
Electronic time clocks: The next generation. Instead of a mechanical punch, electronic clocks print using a dot-matrix printer. Much quieter and lighter. Making them a better choice for offices, as well as manufacturing.
Side printing time clocks: These clocks have a slot on the side where time cards are inserted. You align the card manually on the correct line of their time card. You can also use them print time stamps on office documents.
Top loading time clocks: Automatically feeds the time card from the top. Like bread in a toaster. Eliminating the print errors found on side printers. They can also print in two colors. Black for regular time, and red for exceptions such as clocking in late.
Calculating time clocks: Just like top loading clocks, but with the ability to calculate cumulative time on the time card. If you prefer using a time clock machine for payroll, this is the type to get.
Advantages
Disadvantages
Recommendation
Time clock machines are being used less in small business. However there are times where using one makes sense. For example smaller teams, limited network access, and lower operating budgets. The trade-off is more time spent processing payroll hours.
2. Time clock systems (on-premise)
On-premise is way of saying "not cloud-based" or "no monthly fees". Computer-based time clocks you install and maintain at your place of business. Although often advertised as no monthly fees, there are costs for support, upgrades, and/or annual support agreements. Ask your vendor for details.
Here are a few types...
Software only: There are still companies offering software only solutions. Mostly PC, but Mac solutions have been available. Employees clock in from a computer, or USB finger sensor.
Terminals with Windows software: A terminal could be PIN entry, badge swipe, fingerprint, or facial recognition. The PC software collects data from the terminals, then allows you to run reports.
Terminals only with no software: A more recent trend is from China. They offer low cost terminals that collect time entries, but do not provide software. Instead, you transfer time data to a thumb drive, then upload it to your PC. The transferred file is configured for Excel to run reports.
Terminals only with embedded software: This is more a hybrid solution. Terminals come pre-loaded with web-based software. This allows you to access the software using your computer's browser from your office network. Employees clock in from the terminal.
Advantages
Disadvantages
Recommendation
The key difference is the "no monthly fee". If you really don't want to pay a monthly fee, have only one location, and are willing to manage the extra tasks each solution may have, then an on-premise system may be a good choice. The trade-off is more time spent processing payroll hours; less than time clock machines, but more than cloud-based systems.
3. Time clock systems (cloud-based)
In contrast to on-premise, cloud-based time clock systems are not located at your place of business. They operate from the vendor's servers. That's why they require monthly fees towards maintenance, support, and future upgrades. It's really how software has progressed, and it will continue.
With cloud, you don't pay for software, you pay for "usage". Most often in the form of a "plan". And although there are monthly fees, there are great advantages, you just need an Internet connection.
Here are a few types...
Dedicated online time clocks: Vendors who offer cloud-based time clock services only. Most offer flexible ways for employees to clock in, and features that are specific to time and attendance. Since they are separate from your payroll, it helps you avoid vendor lock-in.
Free time clocks: Some vendors offer free plans, but with a catch. They all want you to upgrade to a paid plan. To do this, they will limit your free version and frequently remind you to upgrade. You may be okay with this, but keep in mind your contact information could also be sold. Generally this is legal in the US, so read the vendor's privacy policy to be sure.
Time clock add-ons for payroll: Most online payroll companies offer time clock add-ons to their platforms. Which makes a lot of sense. Some vendors offer in-house solutions, while others offer third-party integrations. Sometimes both. The trade-off is features. Having an add-on is convenient, but it may or may not have features you need.
Time clock add-ons in vertical markets: Many vendors who serve vertical markets such as construction, day-care, and restaurants also offer time clock add-ons. Makes sense too. And again, it's all about features the add-ons may or may not have. Time clocks with full-integration: Unlike add-ons, these time clock systems are fully-integrated with payroll. Webtimeclock fits this category. What you get is experienced time and attendance combined with payroll technology. No need to send hours to payroll, everything is in one place.
Advantages
Disadvantages
Recommendation
If you need a time clock, then use a cloud-based system. Most businesses already have internet access and mobile phones, so that is rarely a barrier. What is a barrier for some, are the monthly fees, and the feeling of distrust toward the cloud. If you are in that camp I won't try to convince you otherwise. Just know you have a minority opinion.
Summary
Technology has changed how we record employee hours. It has made the process faster, easier, and less costly. No matter what kind of time clock you are considering, at least test a cloud-based service using a free trial. Hope that helps!
Typically, choosing an employee time clock is a task for small business owners, human resources managers, payroll providers, PEO firms, or staffing agencies. Whatever your role, I hope this helps your search. Whether you have one employee, thousands over many locations, or anything in-between.
Why use a time clock?
Beyond recording employee hours, consider the benefits:
Promote fairness. Using a machine or software takes away any personal bias. Nobody has any special advantages or favors. Everyone is treated equally.
Keep employees honest. If an employee clocks in late, then they are late. An indisputable record is now etched on their timesheet to prove it. There may be excuses, but that's a different story.
Know if employees are working or not. Look at their timesheets. Are they clocked in? Some systems have status reports showing the employee's location and what job they are working on.
Reduce administrative costs. This can vary depending on what kind of time clock. But even a basic clock that prints on a time card is more efficient than writing on paper. Clocks that calculate hours can save an hours of time.
Reduce payroll errors. With a completed timesheet, and assuming the approval of both the employee and supervisor, payroll can safely be run. And if the time clock allows data transfer, then human error will be reduced if not eliminated.
Help with compliance. Straight out of the Fair Labor Standards Act (FLSA) guidelines: "The FLSA requires employers to keep records on wages, hours, and other items, as specified in DOL record keeping regulations." Exactly what time clocks are designed to do.
Types of time clocks
There have been many varieties over the years. But to narrow it down, I'll focus on three basic types prevalent today.
- Time clock machines
- Time clock systems (on-premise)
- Time clock systems (cloud-based)
1. Time clock machines
The traditional time clock. Machines with a clock face and mechanism to print a time stamp onto a paper time card. They stand alone with no need for software or network connections.
Here are a few types...
Mechanical time clocks: Traditional, but almost extinct. These time clocks used a mechanical type wheel that hammered through an ink ribbon onto a time card. Making a loud, "ka chunk" sound. It's where the term "punch" clock came from.
Electronic time clocks: The next generation. Instead of a mechanical punch, electronic clocks print using a dot-matrix printer. Much quieter and lighter. Making them a better choice for offices, as well as manufacturing.
Side printing time clocks: These clocks have a slot on the side where time cards are inserted. You align the card manually on the correct line of their time card. You can also use them print time stamps on office documents.
Top loading time clocks: Automatically feeds the time card from the top. Like bread in a toaster. Eliminating the print errors found on side printers. They can also print in two colors. Black for regular time, and red for exceptions such as clocking in late.
Calculating time clocks: Just like top loading clocks, but with the ability to calculate cumulative time on the time card. If you prefer using a time clock machine for payroll, this is the type to get.
Advantages
- No computer or software is required
- Most sit on a desktop, or mount to a wall
- Easy for employees to use
- Relatively low cost
- No monthly fees
Disadvantages
- Payroll hours must be manually entered by payroll staff
- Requires cleaning, ink, and card replacements
- Paper time cards get lost, or ruined. Time card racks can help.
- Malfunctioning machines will need to be replaced
Recommendation
Time clock machines are being used less in small business. However there are times where using one makes sense. For example smaller teams, limited network access, and lower operating budgets. The trade-off is more time spent processing payroll hours.
2. Time clock systems (on-premise)
On-premise is way of saying "not cloud-based" or "no monthly fees". Computer-based time clocks you install and maintain at your place of business. Although often advertised as no monthly fees, there are costs for support, upgrades, and/or annual support agreements. Ask your vendor for details.
Here are a few types...
Software only: There are still companies offering software only solutions. Mostly PC, but Mac solutions have been available. Employees clock in from a computer, or USB finger sensor.
Terminals with Windows software: A terminal could be PIN entry, badge swipe, fingerprint, or facial recognition. The PC software collects data from the terminals, then allows you to run reports.
Terminals only with no software: A more recent trend is from China. They offer low cost terminals that collect time entries, but do not provide software. Instead, you transfer time data to a thumb drive, then upload it to your PC. The transferred file is configured for Excel to run reports.
Terminals only with embedded software: This is more a hybrid solution. Terminals come pre-loaded with web-based software. This allows you to access the software using your computer's browser from your office network. Employees clock in from the terminal.
Advantages
- Automatically calculates total hours
- Reports payroll summaries
- Exports data to outside payroll software
- Allows the storage of historical data
- Reduces errors
- Reduces administrative costs
- No monthly fees
Disadvantages
- Does not support multiple locations without special networking
- Limited to Windows, few support Mac.
- Will not work with phones or tablets
- Support is not usually free after 30 to 90 days.
- Annual support agreements
- Requires you to maintain and backup data
Recommendation
The key difference is the "no monthly fee". If you really don't want to pay a monthly fee, have only one location, and are willing to manage the extra tasks each solution may have, then an on-premise system may be a good choice. The trade-off is more time spent processing payroll hours; less than time clock machines, but more than cloud-based systems.
3. Time clock systems (cloud-based)
In contrast to on-premise, cloud-based time clock systems are not located at your place of business. They operate from the vendor's servers. That's why they require monthly fees towards maintenance, support, and future upgrades. It's really how software has progressed, and it will continue.
With cloud, you don't pay for software, you pay for "usage". Most often in the form of a "plan". And although there are monthly fees, there are great advantages, you just need an Internet connection.
Here are a few types...
Dedicated online time clocks: Vendors who offer cloud-based time clock services only. Most offer flexible ways for employees to clock in, and features that are specific to time and attendance. Since they are separate from your payroll, it helps you avoid vendor lock-in.
Free time clocks: Some vendors offer free plans, but with a catch. They all want you to upgrade to a paid plan. To do this, they will limit your free version and frequently remind you to upgrade. You may be okay with this, but keep in mind your contact information could also be sold. Generally this is legal in the US, so read the vendor's privacy policy to be sure.
Time clock add-ons for payroll: Most online payroll companies offer time clock add-ons to their platforms. Which makes a lot of sense. Some vendors offer in-house solutions, while others offer third-party integrations. Sometimes both. The trade-off is features. Having an add-on is convenient, but it may or may not have features you need.
Time clock add-ons in vertical markets: Many vendors who serve vertical markets such as construction, day-care, and restaurants also offer time clock add-ons. Makes sense too. And again, it's all about features the add-ons may or may not have. Time clocks with full-integration: Unlike add-ons, these time clock systems are fully-integrated with payroll. Webtimeclock fits this category. What you get is experienced time and attendance combined with payroll technology. No need to send hours to payroll, everything is in one place.
Advantages
- Access from any desktop, tablet, or phone
- Some offer GPS tracking and geofencing
- Some offer wall-mounted time clock terminals
- Automatically calculates hours for payroll
- Free support, free maintenance, free backups
- Options to integrate with your payroll vendor
- Stores historical time data
- Lasts for years, nothing to wear out
- Generally more secure than on-premise
- Reduces administrative costs
- Reduces errors
Disadvantages
- Requires an internet connection
- Requires monthly fees
- Distrust of the cloud?
Recommendation
If you need a time clock, then use a cloud-based system. Most businesses already have internet access and mobile phones, so that is rarely a barrier. What is a barrier for some, are the monthly fees, and the feeling of distrust toward the cloud. If you are in that camp I won't try to convince you otherwise. Just know you have a minority opinion.
Summary
Technology has changed how we record employee hours. It has made the process faster, easier, and less costly. No matter what kind of time clock you are considering, at least test a cloud-based service using a free trial. Hope that helps!
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Webtimeclock is an online time clock plus optional online payroll. Have questions? Contact our support team, or call us at 1-800-450-2692. Sign up today for your free 15-day trail. We are located in San Diego (Carlsbad), CA USA.