Time clocks. A guide for small business.

This guide is for anyone who needs a time clock for their business. We'll explain, what they are, how they work, what choices you have, and a few examples.

Here is what we cover:

• What is a time clock?
• How do they work?
• What are the choices?
• Time clock examples
• Summary

What is a time clock?

A time clock is anything that records the start time and end time of an activity. That might be a machine, software, or online app. Whatever the type, the purpose is to track how much time was spent.

Most are used for payroll and tracking labor costs. Employees record when they start and end their work shift. Then, when work is completed, the employer calculates the total duration to determine the employee's regular and overtime hours for payroll.

They can also be used for job costing. Workers record when they start and end a task, job, or project. When completed, the hours are used to track business costs, and for billing clients.

Generally, an employee time clock is used for time tracking and attendance tracking. Also known as time and attendance. If you have hourly employees, you will need a time clock.

How do they work?

There are a variety of ways to clock in, for example printing on a time card, clicking a button on a web page, tapping a button from a phone, waving a badge in front of an RFID reader, or placing a finger on a biometric time clock. Further, facial recognition is becoming more widely used with employees clocking in by facing a camera. It all depends on the type of employee time clock.

Here are a few common terms used with time clocks.

Punch: References the actual time recording, or time stamp. For many years, commercial time clock machines used a mechanical process to record time. A metal die was literally “punched” against an ink ribbon to print on paper.

Clocked in: References if the employee is eligible for compensation or not. When clocked in, the employee should be compensated for every minute worked. When clocked out, the employee is no longer compensated.

Time card: Traditionally, a lined form made from paper card stock used to accept prints from a time stamp. Kept as a record of employee time.

Timesheet: Traditionally, a lined form made of paper used to track time by hand. Functionally, the same as a time card, just without a machine.

Calculating time: The process of adding total hours from a time card or timesheet. This to determine regular and overtime hours for payroll over a pay period. Traditionally done manually but using time clock software reduces payroll errors.

Scheduling: Determines each employee schedule for when and how long the work. Usually by shift. This helps to cover business demand, and lets the employee know when they are expected to clock in.

Buddy punch: When an employee records the time for another employee. If an employer is not aware, an employee could be compensated for time they didn’t work. A practice also known as time theft.

Missed punch: When hourly employees forget to clock in or out. When this happens, the employer needs to determine the correct time to be recorded.

Punch rounding: A feature that rounds the calculation of a punch to a percentage of an hour. For example, the nearest quarter or tenth of an hour.

Clock lockout: Prevents employees from clocking outside their assigned shift. This can prevent employees from accumulating unapproved overtime.

What are the choices?

There are many types of time clocks, and ways to use them. We'll go over the basic types. It's all a matter of what works best for you needs.

Mechanical time clock: A machine that uses a mechanical process to record on time cards. Typically, they use a metal die stamped through an ink ribbon on to the card. Most are no longer being manufactured.

Electronic time clock: A machine that uses a dot-matrix printer to record on time cards. These were developed to replace mechanical time clocks, as they were less expensive, and much quieter. There are many still being manufactured.

Time clock software: Formerly software installed on a PC or Mac, time clock software is primarily offered as web-based (aka cloud-based) services, and used in combination with a data collection device for recording employee punches. Advantages can include time tracking with automated calculations, timesheet reports, employee scheduling, and the ability to export timesheets and creating a payroll report.

Biometric time clock: A data collection device that uses biometric sensors such as fingerprint, or facial recognition. Used in combination with time clock software, or as a stand-alone device. Helps prevent buddy punching.

Badge swipe time clock: A data collection device that uses magnetic stripe or RFID badges. As with biometric, used in combination with time clock software. Probably the easiest way for employees to clock in.

Time clock app: A way of using a phone or tablet as a data collection device (installed or using the browser). The best solution for remote employees. A time clock app is another name for online time clock software.

Scheduling software: Like time clock software, scheduling can be stand-alone, or as an additional feature to the time clock app system. Use it to create each shift and schedule employees by workweek.

No monthly fee: Those searching for time clocks often ask about this. It's a matter of how you want to purchase employee time tracking. Stand-alone solutions do not require monthly fees; however, all cloud-based systems do. Be advised that no monthly fee solutions do not come with free support.

Examples

As a help, here are a few examples.

Webtimeclock: This is us. One of the first time clocks available online. Give it a try. Learn more at Webtimeclock.

QuickBooks Time: Formerly known as TSheets and now owned by QuickBooks. Priced much higher than Webtimeclock.

Timeclock Plus: Started by offering PC software, but are now web-based. Also priced higher than Webtimeclock.

Top 50 Selling Time Clocks: Amazon offers a list of the top 50 selling clocks, most are stand-alone time clock devices at low cost. Prices are usually good are perfect for limited budgets.

Summary

For optimizing human resources, you need a time clock or employee attendance system. Use them to track employee hours, calculate payroll, and keep records. There are many choices, but your best choice depends on you and your specific needs. We, of course, would recommend using Webtimeclock.