Daily, I am pleased to discuss and meet with owners of very small companies, managers, supervisors and department heads. There is a clear trend that emerges for the majority of them: time sheets are a real problem! We will illustrate this with a typical case.
But first, let’s start with a description of the role of timesheets in an organization for readers who are less familiar. In some contexts, as we will illustrate a little further, it is imperative for employees to register the time spent on various activities, this time will be used to charge customers, calculate production costs and, of course, calculate employee payroll.
I will present two real cases. Here’s the first one:
One of my clients told me that the employees working on different projects. Thus they may, for a given day, to be taken to work for 15 minutes at producing a component for the client “X” and 3 hours for the manufacture of another component to the client “Y”, etc. etc. First Data Entry: At the end of the day, or after each job, the employee enters into an Excel spreadsheet allocating their time for the day, indicating the project number, customer name and length of work for this project. Second data entry: By the end of the week, time of all employees devoted to projects they have worked is recorded in another Excel spreadsheet. This will calculate the cost of each of the company’s projects. Indeed, the majority of manufacturing projects being charged at a flat rate, it is important to know the real profitability versus that estimated during the preparation of the bid. Indeed, such an analysis can:
Identify weaknesses in the manufacturing process that increase costs.
Improve the accuracy of future estimates for a real profitability as close as possible to that estimated.
Finally, some manufacturing projects are billed by the hour. ” It is therefore important to accurately quantify the number of hours spent on a project by all employees involved. Third entry: All this, to enter the information again in the accounting software, in order to adequately charge the customer for the product manufactured. In addition, its accounting data used to generate the payroll information for each employee.
Phew! As you can see, in a manufacturing plant, information is typically copied 3 times. This time consuming! In the case of this client which I speak, 7 employees spend between 1 hour and 1 hour 30 minutes per week to write their timesheet. For purposes of discussion, assume that they spend an average of 1 hour 15 in this activity. The carrying meanwhile, spends at least two hours a week to check the accuracy of its data, to grasp them in an Excel spreadsheet and their accounting software. The total loss of time associated with managing timesheets is 10 h 45 a week. The average minimum hourly cost of labor for the company is $ 30 / hour. This includes, benefits. In short, entering timesheets represents an unnecessary cost of $ 322.50 for the employer, and every week.
Let’s look at the latter. There is this customer who spends at a minimum, 20 hours per week in managing timesheets for an average hourly rate of $ 40 / hour (always including benefits) for its 7 employees. This represents a waste of $ 800 per week, or about $ 3,500 per month. Besides this time assigned to clerical duties is not billable time or added value for the company. This brief analysis does not take into account the input errors that inevitably occur. Indeed, correcting mistakes too time consuming! If it happens again too often this has a direct impact on the mood of customers overcharged and employees whose pay is incomplete.
Those who are in the service business can also recognize in this scenario. Indeed, I had the opportunity to talk to contractors that provided technical and repair services on the road, graphic design and architects and they invariably have this problem of triple entry of information: input timesheets, transfer to another Excel spreadsheet for analysis and transferred back into an accounting software
The solution to this is so easy! IT is there to simplify and automate processes. For example, IPSO Biz allows workers to capture their time at the factory from a workstation. Thus, the worker has to enter the number of employees. This can be done by returning the number via the keypad or a biometric reader, for example, a fingerprint reader. Subsequently, it can enter the project number of manufacturing or using the keyboard or by scanning the work order with an optical drive. In doing so, the time to onset of labor and end automatically registers in IPSO Biz. In addition, the time recorded in this way is automatically assigned to the employee (for accurate payroll) and to the right customer through the project number (for accurate billing). The data is automatically recorded in IPSO Biz. For analysis, the real cost is automatically compared to estimated. After making project completed, the invoice is automatically generated. In short, we are moving from a process that grugeait at least 20 hours for one of our typical cases, a process that takes only a few minutes per week. This company pays for the purchase of IPSO Biz in just 6 weeks, and that, just with its improved management timesheets. Obviously this was much faster, because like all businesses, there were other processes that have been enhanced to thereby make even more savings.
Finally! The contractor releases its value without tasks to assign employees to more lucrative and challenging tasks for employees. In short, the company is more profitable, employees and customers are happy.
Similarly, the professional who delivers a service, such as an architect or a graphic designer, can enter his agenda in his Google calendar. This information is automatically pushed into IPSO Biz and the process defined in the preceding paragraph clicks.
In conclusion, even very small businesses can quickly and economically automate processes, increase efficiency and reduce costs through IT.