What is a Time Clock and Why Do You Need One?

Do you still use a sheet of paper and a pen for monitoring the hours effectively worked by your employees? Or maybe you think it is better to let your employees register their entrances and exits for works and breaks.

Managing the exact time worked by your employees comes hand in hand with the payroll. You can’t have one without the other, you must use a timekeeping method and retain records for your employees. So now, it is time to ask yourself: are your employees reporting their time honestly? Are you calculating it accurately and equally? Can you extract from the employee time data the reports you need to identify the problems and make the right decisions?

Some small business owners don’t embrace the idea of switching towards a time clock. Maybe they don’t think their business is large enough to worth the trouble. Or maybe they are just stuck in the past when employees used to sit in line waiting to punch their cards in an old-school punch card system where hours are still calculated manually.

But little do they know! Gone are the days of employees needing to punch a traditional time-clock or fill out a paper timesheet with their hours worked each day. Like many other HR functions, the process of recording how long employees work each day has gone digital. Today’s time and attendance systems give businesses everything they need to track and manage all aspects of their employees’ time. These systems can log when employees start and end their day, show them their weekly schedules, and provide a portal to manage time-off requests. 

The inclusion of time clock software into a company’s standard policies and procedures will improve operations by way of efficient record-keeping and reliable metrics to measure the true costs of labor. The content of this article will address the following:

  • What is an Employee Time Clock?
  • 7 reasons why you need Time Clocks
  • Time Clocks pros and cons
  • 5 of the most common types of Employee Time Clock

What is an Employee Time Clock?

A time clock is a device or software that employees use to record when they clock into and out of work. Generally, employees manually insert a time card into a machine or press a button. The machine automatically records the date and time when employees punch in and out. Employees who use time clocks must be physically present to clock in and out of work.

Many companies today continue to rely on time card punch clocks and the manual recording of employee hours. These methods have proven to be unreliable, time-consuming, and negative to the bottom line.

Due to technology and innovation, the process of recording the hours spent by each employee at the workplace is now digitized. The use of a time clock app and the implementation of technology to its full capacity are an effective method for managing time and attendance records, enforcing company policies, and adhering to labor laws.

An online employee time clock is a system that allows employees to clock in and out of their job from authorized locations, through devices such as a smartphone or a terminal at the worksite. That data is automatically integrated into the payroll system. It is automation at its most flexible, for both the manager and employee, reducing hassle and error when tracking time.

7 reasons why you need a time clock?

Here is a compilation of seven of the most significant benefits of the time clocks software:

  1. Gain accuracy in employee paychecks

An electronic time clock begins time tracking through the app when the employee punches in for his/her shift. Integration with the human resources and accounting departments will generate reports on-time records and payroll, and thus the need for manual time and attendance recordkeeping is eliminated.

By the reduction in staff needed to manage the records and data, the time spent by management to check, approve, or refuse the times-related documents is also reduced. These efficiencies in time will decrease the costs associated with payroll, thus increasing profits. The return on investment in time clock software.

In the absence of time clocks, employees are typically expected to record their hours based on memory. This can occur at the end of each day, week, or pay period. Employees will need to document when they arrived at work, how long each of their breaks and lunches were, as well as when they left at the end of the day. 

They are bound to be mistaken with this type of record-keeping, and leveraging time clocks can take the burden off of the employee. Now, both the manager and employees can appreciate the accuracy of the paychecks.

  1. Increased productivity

When it’s time to process payroll at the end of a pay period, a manual process requires you to collect time cards and re-enter the data into your payroll solution. The time necessary to do this for an entire organization can be extremely tedious. If the responsibilities are on one person, this can take several hours to do. 

Using time clock and attendance software drastically reduces the amount of time it takes to process your payroll. You can go from spending hours processing payroll to a matter of minutes when you make the switch.

Automating time collection through the time clock ensures that everything is in one place. This allows for your data to be automatically sent to your payroll solution for processing and eliminates the need for data to be re-entered manually. The result is accurate processing that can take as little as 20 minutes per pay period. Reducing the time it takes to run payroll while increasing the accuracy of your data, can lead to an increase in productivity. 

  1. A higher level of security

Timecards filled out by employees provide practically no security around the falsification of reported time. Whether intentional or not, employees may record shorter breaks or lunches and receive more pay than they have earned.

The company also runs the risk of “buddy punching,” which occurs when one employee fills out a time card for another employee; either because they were absent or late to work. This sort of thing would never happen with a biometric fingerprint reader on a time clock! 

This innovative feature eliminates “buddy punching” issues and time theft as it increases the reliability of the tracking system. Bioprinting ensures the employees are compensated for actual work performed during actual hours expended.

  1. Increased employee satisfaction and empowerment

Time clock and makes employees happier because the software guarantees timely and accurate pay. 

Also, it gives employees secure access to their data through an employee self-service portal. This makes it easier for employees to access information without having to go through the human resources department.

With effective communication and training, employees can be encouraged to manage their time-related activities. When employees are trained in effective time management in connection with their work schedules, these skills will also extend into productivity. Employees feel empowered when they have access to their information, and that level of empowerment can lead to increased satisfaction.

  1. Time is money

Time is an important resource of any business, whether start-up, growing or established. The investment in time clock software is prudent with measurable returns. Regardless of the growth cycle of a business, all employees need to have an established schedule to cover all required tasks, objectives, and goals.

The real-time data in time tracking and reporting features will aid and support management decisions to either reinforce or change its policies. The more time and energy available at the management level will be an increase in time spent on performing tasks and implementing policies to improve operations.

It is always to the company’s advantage when the time and focus of management and human resource personnel are devoted to strategic priorities and long-term goals, not on tedious, time-consuming tasks.

  1. Compliance

Time clocks can be programmed with organizational rules and regulations based on an employee’s worked time or schedule. They can be used to notify managers if an employee is late, absent, takes too many breaks, or leaves early, not to mention, these alerts are available to the manager as soon as they occur. It is nearly impossible to track all of these occurrences using paper time cards.

Time clock software can be customized for integration into the company’s current systems for points of sale, human resources, accounting, marketing, and supply chain logistics. It is the implementation of policies derived from real-time data, and the flexibility of the policies as the data changes over time, that contribute to the success of a company.

  1. Legality 

When comparing time clocks to time cards that are manually collected and entered, the margin of error is much higher with the latter. Not only will mistakes affect employees’ pay and cause a decrease in morale, but payroll errors can also result in audits and fines with the labor authorities. Time clocks provide a safeguard to legal trouble by keeping meticulous, accurate records of employees’ worked time. 

Time clocks pros and cons

Before deciding if the implementation of a time clock is the correct solution for your business, find out more about the arguments and counterarguments.

Time clocks pros

  • Many businesses use time clocks to monitor employees’ attendance, decrease time theft, and increase timekeeping accuracy.
  • For you, as the manager of a busy small business, monitoring employee attendance can be challenging, especially if they have a varying schedule.
  • Time clocks, especially biometric time clocks, eliminate the time theft instances, as the employees must physically be at the workplace to clock in and out.
  • Time clocks improve the accuracy of the payroll and recordkeeping. When employees use a system to punch in and out, the time clock automatically generates a record. This can make it easier to track regular and overtime hours. 

Time clocks cons

  • Employees might think that you mistrust them. Requiring employees to punch in and out each time they enter and exit can create suspicion, which may lead to a drop in morale. Employees might become more concerned with timeliness than improving their work.
  • Another disadvantage of using time clocks is that they might be inaccurate: employees might forget to punch in and out; they can lose their time cards.
  • Time clocks don’t guarantee employees are at work when they say they are. An employee can still commit time theft with time clocks by punching in and then leaving. Or they can ask a coworker clock in for them if they are running late or skipping a day of work.

The most common types of employee time clocks

If you decide that it’s time to start using a time clock in your business, you can choose a system that perfectly fits your business needs.

There are many types of employee time clocks on the market, but the most common are the following:

  • Punch card time clock

This is perhaps the most common form of a time clock. The employee places a time card into the machine, which triggers the printing mechanism and prints the time and date onto the card. Punch card clocks are suitable for small businesses because of their simplicity. They also can keep a running total of work hours, which aids in payroll management. 

  • Digital time clock

A digital time clock is a modernized version of the punch card clock. Instead of inserting a time card, the employee swipes a card containing a magnetic strip through the machine, which records the date and time. Another version of the digital clock is an electronic touchpad on which the employee keys in a personalized code.

  • Biometric/ fingerprint time clock

Fingerprint clocks prevent potential fraud by reading a worker’s individual fingerprint or biometrics. The employee presses the finger against the scanner, which then “reads” the print. This eliminates the need for punch or key cards, and the employees don’t have to memorize a code. Check the laws in the country where your business is, as using biometric time clocks is something new and disputed. 

  • Time station software

Time station software allows employees to log in and out on a personal computer. Depending on the type of software, the company can require employees to use one specific computer or their individual workstations for time entry. An advantage of the business is that it can download the time information into payroll software programs for easy recordkeeping.

  • Hand punch time clock

Hand punch clocks work much like fingerprint clocks, except that the user places the palm of his hand onto a scanner instead of a finger. The process is quick and efficient, taking one second or less. Like the fingerprint clock, these clocks are effective in preventing “buddy scanning” in which one employee logs in or out for another.


Employees must be recognized as a part of the solutions to the typical problems of time management and an integral part of the improvement of the experience of the customer or client.  To assume that time clock software is simply the electronic method of “punching the clock” is severely underestimating the technology. The proper application of this technology can be a tool used to increase company output, employee accountability, and profit. Managers and supervisors are relieved of the daily administrative tasks of time-tracking records when these responsibilities are shifted onto the employees.

Time clock software can be extended to improved employer/employee relations. When employees become aware of the company’s attention to compliance, mobile access, real-time accrual of personal, sick and vacation time and transparency, positive results in morale are the byproduct of the importance a company places upon its governance and workforce.

Choose the Best Employee Timesheet Management Solution for Your Business

The first-ever employee timesheets were daily records made by an administrator who severely watched the clock on the wall. In the XIXth century, the industrial revolution made it impossible for a single administrator to watch hundreds of employees, so the punch cards took their place. It was easier and faster to allow the employees to record themselves the time when they arrived and left work. 

Nowadays, you have a wide range of employee timesheet management solutions. Although the old methods are still in place, more and more companies adopt modern digital solutions. Some companies are using automatic systems to track employees’ activity. Others rely on access badges. Many of them use dedicated software and store data in the cloud. However, the existence of so many different employee timesheet management solutions is proof that none of them is the best solution. So how can you choose the best employee timesheet management system for your business?

Types of employee timesheet management solutions

First of all, you should know all the available options. How many employee timesheet systems are, and what does each of them offer? Here are the major categories of employee timesheet management solutions:

  • Employee timesheet management on paper – They seem old-fashion but are still in use. Employees write the time and sign on a sheet of paper each day, when they arrive at work and when they finish their work hours. An administrator collects the files at the end of the month and reports the data to the accounting department. This system is free but uses a vast amount of paper each month and is hardly an eco-friendly system.
  • Employee timesheet management in Excel – Excel spreadsheets represent the perfect for well-structured records. Excel also provides calendars, time formats, and formulas for computing the amount of time an employee has worked in a day or month. There are many free Excel timesheet templates available. However, you need to buy a license for Microsoft Excel. Alternatively, you can use similar software that doesn’t require a license, like OpenOffice or cloud-based tools such as Google Sheets.
  • Dedicated timesheet management software – This solution provides tailored tools that adapt to your business’s needs. The data is processed manually, but you get periodic updates and maintenance, custom reports, and automatic backups. The software can run offline or online, with storage space in the cloud. While you can find free dedicated timesheet management software, most solutions for large businesses require a yearly license or monthly payments.
  • Automatic timesheet management – Many businesses choose to use the building’s access system or biometric systems to track how much time employees spend at the office. Working hours are recorded automatically, and this can save a lot of time. Even if the data is not 100% accurate, many companies prefer to have an overall situation without bothering employees with daily timesheet management. Other automatic timesheet management solutions track employees’ activity using software that records how employees use their workstations. Such algorithms use state of the art technologies, and some of them even artificial intelligence to learn how an employee uses the computer and shares working hours between different tasks. Nevertheless, automatic timesheet management solutions are expensive and can raise many ethical problems.
  • Employee timesheet management using access cards – Another alternative to classic timesheet management systems is recording information provided by access cards and biometric surveillance systems. Employees are identified when entering or leaving the office and data is automatically saved to track their working hours. However, these systems are expensive. They have other drawbacks too, such as recording data each time an employee exits the building even if it’s for work purposes, the possibility of exchanging access cards between employees, and losing data due to system malfunctions.

Things to consider when you choose an employee timesheet management solution

After doing your market research and finding out the available timesheet management alternatives, you should consider your business’s needs. It’s useless to dream at a sophisticated solution when you don’t have the budget for it. Also, choosing the cheapest solution when you have to manage hundreds of employees working in different time zones can create chaos and increase overall costs. Here is a list of things you should consider:

  • Budget;
  • Number of employees;
  • Working locations and their facilities;
  • Hardware resources and IT support;
  • Computer skills of the employees;
  • Internet connection;
  • Maintenance costs;
  • Company’s culture.

Nice-to-have features of digital employee timesheets:

Let’s face it: you probably won’t choose a paper-based timesheet in 2020. Thus we can focus more on digital solutions and help you decide between them. Digital timesheets can be amazing, but if they don’t fit your employees’ computer skills and hardware and software resources, they won’t help you. So, first of all, make sure the timesheet is accessible to your employees. For example, if your employees have never worked with Excel, it’s pointless to choose an Excel-based timesheet solution. Better go for dedicated software, with a user-friendly interface and many automatic processes. Nevertheless, prepare tutorials and workshops to ease employees’ accommodation with the new system.

To make things easy for everybody (employees, managers, the HR department, and the accounting department) look for the following features:

  • Online timesheet app with storage space in the cloud;
  • Customizable number of employees;
  • Tailored reports and statistics;
  • Automatic backups;
  • Automatic updates;
  • Payroll integration;
  • Maintenance included.

In conclusion

While time tracking automation can save a lot of time, you need to use a suitable time and attendance solution. We recommend staying away from free timesheet solutions, as most of the cases there are some strings attached. Moreover, when you have to manage remote work, part-time, and employees with different labor policies, you can’t rely on automatic systems anymore. Employee timesheet management has to be transparent, accurate, and flexible. It’s important for maintaining employees’ work satisfaction and motivation. Thus, in many cases, employee self-service is empowering and builds trust and good work relations. It’s up to you to choose the best employee timesheet management solution for your business. But keep in mind that it has to please all people involved, from employees to managers.

What is a Timesheet?

Timesheets have been around since the industrial revolution in the 19th century. Over time, they have changed their form, but their aim remained the same: to track employees’ work hours and determine their monthly payment.


A timesheet is a written record of the exact time an employee arrived and left work. In the older days, timesheets were made of paper or cardboard and stamped by administrative personal or time clock machines. While you can still find paper timesheets in some offices, most companies use digital timesheets created using text editors, Excel templates, dedicate software, online apps, or even access cards.

The benefits of timesheets

The main benefit of timesheets is maintaining accurate records of the time an employee arrived and left work. They are the easiest way to know how many hours an employee has worked. And based on these records, one can compute monthly wage.

Nowadays, monthly work hours are automatically calculated based on digital timesheets.

But timesheets have other benefits too. They eliminate mistakes and contradictions between staff and the management team. Timesheets also record overtime hours, which allows employees to be paid fairly for their work. By maintaining a transparent tracking of the work hours, the management team can combat burnouts and absenteeism. Timesheets are a good indicator of the efficiency of workers and stressful periods too.

By incorporating digital timesheets into the payroll system, a company can automatically manage remote teams, freelancers, and part-time employees.

How to use a timesheet?

Whether your company uses a paper or a digital timesheet, there are several ways to use it:

  1. The timesheet is updated by employees.
  2. The timesheet is updated by the administrative staff.
  3. The timesheet is automatically updated by reading employees’ access cards.
  4. The timesheet is automatically updated based on the clock-in punches.

A timesheet can cover a day, a week, two weeks, a month, or a specific period. At the end of the period specified by the timesheet, a member of the administrative team computes the number of hours an employee has worked for and communicated the results to the accounting department.

Integrated digital systems perform these operations automatically and provide real-time situations. In practice, the timesheet app reminds the employee to verify entries and submit and submit it for the line manager for approval. The supervisor checks the regular hours, and if there are overtime or additional absences and tries to avoid discrepancies like work within non-working days or multiple days of overtime, although the workload was not high.

Paper versus digital timesheets

One may say that’s no need for paper timesheets anymore. However, some companies prefer to use them because they’re accessible to all employees regardless of their computer skills, don’t need power or dedicated devices, and can be used in very remote locations. Moreover, for companies with few employees, the costs of implementing a digital system are not justified.

On the other side, large multinational companies with thousands of employees can’t work with paper timesheets. They need fast and efficient systems to track employees’ work hours. For them, costs aren’t an issue. They usually use integrated systems that track work hours, overtime, lunch breaks, and leave days and automatically communicate data to management, HR, and accounting departments.

As a result, before choosing between paper and digital timesheets, consider your company’s profile, number of employees, budget, and IT resources.

What features should digital timesheets have?

If you decide you need a digital timesheet solution, consider the following features:

  • Employee self-service with online clock-in – Employees can clock in and out from their desk even when they work from home or in remote locations.
  • Integration with the payroll system – You can skip manual computations because the system automatically communicates data to the accounting department.
  • Integration with the time-off manager – All employees’ data should be in one place, easy to manage and analyze. Using an integrated system allows the employees to manage their working hours and leave days in seconds.
  • Tailored calendars – When you’re in charge of employees working around the world you have to deal with public holidays, time zones, different leave policies, and different time schedules. Timesheet software should manage all this for you and give you the right tools for it.
  • Secure logins – Software should have secure connections and credentials for each employee. It should also accept different types of accounts and permissions.
  • Automatic reports – Timesheet software solutions should provide automatic working hour time reports making overall and individual statistics efficient and easy to follow.

How does digital timesheet software work?

Digital timesheet software can work offline (only in your company’s intranet) or online. You can choose from desktop software, online services, and mobile apps. You can choose to store data on your local servers or in the cloud. But regardless of the technical solution you choose, timesheet software provides customizable tools for time tracking.

Employees can use timesheet software to enter daily work hours, over time, the exact amount of time they spent with a task or project, leave days, and personal time off. Each employee has unique credentials to access their accounts. The software automatically generates reports and transmits data to the HR and accounting departments. Also, the software periodically creates backups and safely stores the employees’ data. And, of course, it doesn’t make mistakes or miscalculations.

In conclusion

Timesheets have been around for a long time and they’ll continue to be. So choose the best timesheet for your company and create a transparent and productive workflow. It’s important to use a timesheet that suits your employees’ work profile and skills, provides easy ways to enter data, and can be adapted to your company’s hierarchy.