In today’s fast-paced business world, it’s tempting to think the biggest digital revolutions involve AI or cryptocurrency. But for business owners dealing with the day-to-day grind, it’s often the more mundane tasks, like time and attendance tracking, where digitization can make a real impact. If you're still using paper to record this information, you could be losing valuable time and money—and increasing your legal risks during audits.
At Lift HCM, we’ve helped countless companies move from outdated methods to digital solutions, making it easier for them to track time accurately, reduce losses, and minimize compliance risks. In this post, we’ll explore the most critical challenges businesses face with paper-based time and attendance systems and show you how a digital solution can save your business time and money.
Problem #1. Paper-Based Time and Attendance Systems Are Prone to Errors
Logging time on paper often leads to inaccuracies due to bad handwriting, manual time rounding, or clocks being off by a few minutes. Here’s why these small mistakes can cost you:
- Human errors: Employees may forget to clock in or ask someone to clock in on their behalf.
- Discrepancies: Bad handwriting or different time sources can cause inconsistent records.
- Lost time and money: Even small mistakes can add up, creating extra costs for your business.
The more inaccuracies in your records, the harder it is to reconcile hours worked with what employees are actually owed. That’s a liability waiting to happen. In a worst-case scenario, errors could lead to wage disputes or labor law violations.
Problem #2. Time Theft In Paper-Based Time Tracking
Allowing employees to manually record their own time can open the door to inaccuracies and estimations that cost your business. Time theft, where employees clock in or out inaccurately—whether intentionally or unintentionally—can have a significant financial impact.
Below is a bar chart showing how much time theft (due to late arrivals) can cost a business over different time periods (one day, one week, and annually).
Let’s consider an example: You’ve got 12 employees scheduled to work 9 AM to 5 PM five days a week, earning $20 an hour. If just four of those employees consistently arrive 20 minutes late three days a week, you're looking at an annual loss of $4,160. And if you happen to own a coffee shop, it might sting even more knowing that they’re stopping by a competitor’s café on their way in.
Time theft may seem trivial on a small scale, but it adds up and can affect your bottom line over time.
Problem #3. Paper-Based Time and Attendance Systems Pose Compliance Challenges
Beyond financial losses, paper-based time tracking can lead to compliance issues with labor laws. Employees may accidentally (or deliberately) report incorrect hours, potentially leading to violations of labor laws, especially when it comes to overtime, break times, and maximum work hours.
Below is a vertical bar chart comparing paper-based and digital time tracking systems on their ability to maintain compliance with labor laws (e.g., overtime tracking, break time enforcement). Digital systems are shown to excel in all areas of compliance.
Failing to comply with state and federal labor laws can result in expensive fines and damage to your reputation. Having an accurate, automated system for tracking hours is crucial for ensuring compliance.
Problem #4. Physical Time Cards and Attendance Records May Leave You Vulnerable in an Audit
Storing paper time records comes with its own set of risks. Paper records are easy to lose, damage, or misfile, which can spell trouble if you’re ever audited. Even meticulously organized paper files can be ruined by an unexpected event, such as a fire or flood, leaving you scrambling to piece together missing information.
In the event of an audit, having all your records in one centralized digital location means they’re easy to retrieve. Should your paper-based treasure map lead you astray, you could face hefty fines and penalties.
Problem #5. Paper-Based Time Systems Create Security Vulnerabilities
Another major issue with paper-based systems is the lack of real-time information. Without knowing who is on-site at any given moment, you can’t ensure that only authorized personnel are on the premises. In the event of an emergency, this could become a safety hazard since you wouldn’t know who’s in the building or where they’re located.
Below is a chart comparing the key features of paper-based and digital time tracking systems, including accuracy, time theft prevention, legal compliance, security, and ease of use.
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Moreover, if there’s an internal theft or security breach, relying on paper records makes it nearly impossible to track who was present during the time of the incident.
Digital time and attendance systems give business owners real-time insights into who’s on-site, improving both security and accountability.
Is it Time to Weigh Your Options on Time and Attendance?
Ditching paper-based time and attendance systems for a digital alternative can help businesses prevent losing money to time theft, avoid inaccuracies that could leave you liable for payroll or labor law violations, minimize legal exposure during audits, and improve employee security.
At Lift HCM, we’ve been helping companies make the leap to digital solutions since 1967—long before most people even considered going digital. With our expertise, you’ll be able to transition to a time and attendance system that’s right for your business, giving you more control, accuracy, and peace of mind.
If you're tired of managing paper time cards and the risks they bring, let Lift HCM help you make the leap to digital. With our expertise, you'll have a system that’s accurate, compliant, and easy to use. Ready to get started?
