Why You Should Track Hours For All Employees (Flat Rate and Hourly)

Now that we’ve discussed flat rate vs hourly employees, let’s take a bit of a deeper look into flat rate employees. Managing flat rate employees poses a bit of a tricky question: do they need to clock in?

To put it simply: yes. Flat rate employees should still clock into work each day. This is mostly just to stay in check with state laws, however. What we should really talk about is why you should track billable hourly employees the same way you track flat rate employees.

The reasoning behind this lies with the concept of unapplied labor, so it’d be best to have some understanding of that before continuing (click here!).

The reason why its so important to have these employees tracked properly is for your income (P&L) statement. One of the main costs any business will have is unapplied labor. These indirect labor costs boil down to the number of hours employees are not maximizing their time. To track unapplied labor–and thus be able to control labor costs–it is critical to have time and attendance documentation systems in place. By tracking the billable hours and applied time of hourly employees, your business will become far more efficient.

To avoid losing time (and money), make your employees punch in! By monitoring their hours worked, time tracking will allow you to see your labor cost. Punchey, in tandem with time clocks, will save you the effort and energy of having to crunch numbers to find this by yourself. When you have your employees clock in, you empower Punchey to make your life easier and more profitable in a big way.

Another reason to track time and attendance is to meet demand. By tracking your employees and utilizing Punchey’s unique demand heat map, you can stagger your staff to meet demand at any time.

Finally, business owners should track time to run payroll. Whether you do it by hand or through payroll software, it is critical to get wages paid properly. By knowing your employee’s labor cost and attendance, you will cut down total costs and simplify your payroll.

While comparing your payroll to your income sheet, you’ll see just how much unapplied labor is costing you! Typically, unapplied labor is a massive operating expense that can be a real drag on your business. By tracking billable hours through Punchey, you’ll move this cost to applied labor: the cost to you to provide your good/service. Not only will this save you money, it will save you time.

So yes, you should still have your flat rate employees punch in each and every day, but you should also track the billable hours of your hourly employees. Tracking your employees working is a critical step towards operational efficiency; combining this with Punchey’s unique software will take your business to new heights.

Updated on October 10, 2019

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