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.