Clocking In And Out: Best Practices

Clocking in and out at work is an integral part of how your business functions every day.

Without accurate records of who worked when and on what, a sizable portion of your operation — everything from payroll to invoicing to strategic planning to day-to-day team management — would eventually grind to a halt.

And, while work hour tracking is essentially just a matter of writing down start and end times, there are ways to make it more efficient, productive, and easier to manage.

In this article, we discuss some of those best practices that can help improve the way you and your team conduct the clocking in and out activity.

Table Of Contents

• What Exactly Is “Clocking In”?
• Benefits Of Creating A Time-Tracking Policy
• Is Clocking In And Out Right For Your Team?
• Options For Tracking Employee Time
• Clocking In And Out At Work: Best Practices
• Choose The Right System For Clocking In And Out At Work

What Exactly Is “Clocking In”?

When people hear “clocking in” their minds almost immediately go to a punch card system, where employees insert their card into a machine and it gets stamped with their hour of arrival and departure.

Although some companies still use this sort of analog system, most businesses have moved to more tech-savvy approaches.

But the point of the exercise is the same: to capture the hours your employee has worked in order to accurately process payroll.

Benefits Of Creating A Time-Tracking Policy

Before you implement any time-tracking practices, it’s crucial to have a policy in place. Your policy should cover the mechanics of clocking in and out, dos and don’ts, and consequences for not following the procedure.

Here are a few key things to include in your policy:

• How lunchtime breaks are handled — do employees have to clock out and back in?
• How early are they allowed to clock in?
• How late are they allowed to clock out?
• Do they have to get permission if they’re working beyond those hours? What process should they follow?
• What happens if they forget to clock in or out?
• What are the consequences of buddy punching or inaccurately reporting time?

You should also be sure to communicate how you’re accounting for time, whether you’re rounding to the nearest 10 or 15 minutes, and whether lunches are paid or unpaid.

Having a clear policy will save you many headaches when you’re running payroll. Here are just a few of the benefits.

Calculating Payroll Accurately

This is arguably the most important reason to establish a timekeeping policy. Capturing employees’ start and end times is the law when it comes to hourly employees and non-exempt salaried employees, as they are paid based on time spent at work and are entitled to overtime.

If there’s no policy in place, it’s hard to verify the accuracy of the hours worked. For instance, an employee may be buddy punching, clocking out well after hours, or forgetting to clock in or out entirely.

Hours could end up either over or understated as a result, making the task of payroll worlds more complicated.

Forecasting For The Future

In addition, accurate payroll is the backbone of any forecasting, as you will need a clear handle on current hours worked and labor costs to project your needs in the future.

Avoiding Workplace Frustration

Any ambiguity in your policy (or lack of policy altogether) can lead to miscommunications that cost valuable time and emotional effort for both you and your employees. A clear policy can help you avoid any such confusion.

Maintaining Consistency Across Employees

A policy will also make your life easier as everyone in your business will be accounting for their time in the same way. From an organizational perspective, you’ll be able to breeze through payroll much faster as there should not be inconsistencies that you have to investigate.

Tracking Invoices

If your employees bill an external party as part of their job, a time-tracking policy is crucial for accurate invoicing.

Preventing Fraud

Another benefit of having a clear policy in place is that you can avoid workplace fraud. Getting rid of gray areas goes a long way toward keeping your team honest.

It’s especially important that employees understand what disciplinary actions they can expect if they are caught breaking any of your company’s timekeeping rules.

Decreasing Employee Stress

A clear policy and properly implemented time-tracking system means that your team is less likely to be stressed or burned out.

Is Clocking In And Out Right For Your Team?

Whereas some employees have to clock in, others do not. Here are some things to look at when determining how to handle timekeeping in your business.

Pay: Salary Vs. Hourly

As we said earlier, if your employees are paid on an hourly basis or are non-exempt salaried workers, clocking in and out in accordance with your time-tracking policy is mandatory.

Not only does it have a direct impact on their weekly salary, but it’s also how you’ll determine if they are entitled to overtime pay.

This being said, there are benefits to having your exempt employees use the tracking system as well, especially if it’s able to track tasks and has other advanced features.

Tracking time-on-task will help you better understand task-based productivity, identify issues that might require retraining or realignment, and better forecast for the future.

Type Of Work: Employees Vs. Contractors

We’ve already covered hourly, non-exempt, and exempt employees, but what about independent contractors? There’s no federal law that requires you to track an independent contractor’s hours, so you’ll probably opt to track milestones and deliverables instead.

Of course, the details of your arrangement in this instance will be outlined in the specific contract governing your relationship.

Location: On-Site Vs. Remote

Once you decide that your team should be using a time tracking system for clocking in to work, the question is which one to use. Are your employees all together in one centralized location? Or do you have some on-site employees and some remote employees?

Where your employees are located will have a large bearing on what timekeeping method you’ll use.

Options For Tracking Employee Time

This brings us to the different time-tracking systems available that can enable your employees to clock in at work, ranging from manual to tech-enabled options. Let’s take a look.

Timesheet Forms

One way to capture an employee’s time is to give them a timesheet to fill out on a daily basis. Keep in mind that with a timesheet, all hours are self-reported — which can lead to inaccuracies and take time to compile and verify.

Physical Time Clocks

You also might have a physical time clock on site, which can be a punch card or even a biometric scan that captures arrival and departure times via a fingerprint or retina for instance.

Of course, if you have staff both on-site and remotely, this will only work for those on-site. Also, keep in mind that biometric time clocks are pricey. Your team may also express privacy concerns due to the potential misuse of data.

Digital Portal Or Mobile App

Another means of timekeeping is using a digital portal or mobile app. This is convenient for employers because all employees’ time is consolidated and compiled in one place. It’s also a preferred method of timekeeping for businesses with remote or traveling workers.

Further, many digital portals and apps offer multiple functions and many levels of information that will make it easier for you to track tasks and create work schedules.

These systems may also serve to simplify billing and invoicing, calculate payroll, and identify any productivity issues or retraining needed. Some even enable you to turn on geofencing tools, allowing employees to only clock in when they’re in certain locations.

Inch is one such timekeeping solution. It offers a robust mobile and desktop platform that allows you to schedule, track, task, and communicate with your employees.

Clocking In And Out At Work: Best Practices

1) Obey All Timekeeping Laws

Whether you’re building a brand new system for clocking in and out at work or revamping an old one, one of the first things to do is make sure your business is obeying all local, state, and federal timekeeping laws.

At the federal level, the Fair Labor Standards Act (FLSA) sets guidelines for things such as:

• Part-time hours
• Full-time hours
• Wages
• Overtime
• Time clock rules
• Record-keeping practices
• And much more

Keeping detailed records to support all of the FLSA requirements is essential.

Sound complicated? It can be, but keep in mind that all businesses in the United States must comply with these laws — and most states also have their own time-tracking laws.

Then, to complicate matters even more, timekeeping laws often differ from city to city and industry to industry.

To avoid running afoul of these regulations, it’s essential to talk to an attorney who is well-versed in both labor law and the industry in which your business operates.

2) Customize The Process According To Your Needs

Not all time tracking systems are exactly the same.

You can customize many of the variables that make up the inner workings of your process to accommodate the way your business operates — both in the short term and in the long term.

Two of the most important variables to consider are time format and rounding rules.

Time Format

The time format you choose for your clocking in and out process may not seem all that important, but it can make things easier or harder later on in the payroll and recordkeeping parts of your business.

In this case, you have two options:

• Standard format (a.k.a. 12-hour format)
• Military format (a.k.a. 24-hour format)

Standard format is the most familiar — because it’s how the majority of the workforce reads their clocks — but is often the least useful for tracking employee work time for two crucial reasons:

1. It starts over every 12 hours
2. It relies on a time-of-day indicator (i.e., a.m. and p.m.)

For example, if Nancy works from 8:00 a.m. to 6:00 p.m., her total hours (10) are not immediately obvious, and you’re going to have to do some thinking to figure out the final number.

The other format you can choose often makes this calculation a bit easier.

Military format is the least familiar to a large portion of the workforce but is the most useful for tracking employee work time for two crucial reasons:

1. It starts over every 24 hours
2. It doesn’t rely on a time-of-day indicator

Here’s how military time works:

• Hours from midnight to noon are displayed just like the standard format (e.g., 8:15, 10:30, 11:45, etc.)
• Hours from noon to midnight are displayed by adding hours to twelve (e.g., 3:20 p.m. would be 12 + 3:20, or 15:20 in military format)

This format makes it simpler to calculate total work hours at the end of the day.

For example, if Nancy works from 08:00 (military format) to 18:00, calculating total time on the job is easier because all you have to do is subtract 8 from 18 — Nancy worked 10 hours.

Rounding

If you allow team members to record small fractions (e.g., eight hours and 17 minutes) when clocking in and out at work, the payroll calculations that follow closely behind are going to be extremely difficult.

To avoid this issue, the federal government allows businesses to round up or down to the nearest 10 or 15 minutes.

For example, if your business chooses to track employee hours in 10-minute increments, 07:01, 07:02, 07:03, and 07:04 (military format) would round down to 07:00 for tracking, payroll, and record-keeping purposes. 07:05, 07:06, 070:07, and 07:09 would round up to 07:10.

If, on the other hand, your business chooses to track employee hours in 15-minute increments, the 7-minute time clock rule applies. Under this rule, you round down if clocking in zero to seven minutes past the quarter hour and up if you clock in eight to 14 minutes past.

This means any time between 07:01 and 07:07.59 rounds down to 07:00, while any time between 07:08 and 07:14.59 rounds up to 07:15.

If rounding wasn’t allowed and your business had to accommodate all numbers between one and 60, the calculations for payroll and other business metrics would be extremely tedious and unnecessarily complicated.

Take advantage of the 10- and 15-minute rounding laws to make your job easier.

3) Keep The System Simple

Once you’ve settled on the inner workings of your clocking in and out process, do your best to keep the rest of the system as simple as possible — both for employees and managers alike.

Employees

With an efficient system in place, clocking in and out should only take a few seconds to complete.

Anything more than 10 or 15 seconds, and you’re throwing a speed bump into the workflow.

Examine the system you have in mind before rolling it out, practice it yourself, and, if the process is too complicated, overhaul it to make it simpler and quicker to execute.

Managers

For managers, it’s less about the speed with which they execute the clocking in and out process itself and more about the speed with which they can work with the data they need to get their job done.

A simple system will allow your managers and HR personnel to analyze and manipulate all the data as quickly, easily, and intuitively as possible in order to streamline many of the other complicated processes, such as payroll, invoicing, and team management.

4) Prevent Time Theft

Time theft is accepting wages for time not actually spent on the job.

The theft can be deliberate, accidental, or just negligent, but, regardless of how it occurs, the loss of time and money may have a negative effect on the way your business is able to operate.

Depending on the system you have in place, there may be no way to actually prevent time theft from occurring, but you can make it a serious offense — punishable by loss of pay, suspension, and even termination — in order to deter the practice.

If you have a digital time tracking system, consider incorporating biometrics to make it harder for your employees to claim they worked periods of time that they actually didn’t.

5) Automate As Much As Possible

Modern time tracking technology, such as Inch, can automate much of the clocking in and out process with built-in features that allow you to do a good portion of the work right there at the recording terminal, including:

• Approving or denying overtime
• Adhering to labor budgets
• Applying wages by employee or position worked
• Tracking location
• Restricting when and where employees can clock in or out (with geofencing)

With this type of automation in place, your business will be better positioned to keep employee time tracking as simple and as efficient for everyone involved.

6) Provide Training On Your Timekeeping System

Timekeeping is an essential part of your business, so it’s important to provide training in your chosen time-tracking system. During training, you can reinforce the policy you’ve created and answer any questions.

If you’re introducing a new system, you’ll want to train the entire team. For new employees, ensure that timekeeping training is a part of your employee onboarding process. Also, keep a written account as well so that employees can refer back as needed.

7) Be Consistent

One of the most important things to remember when implementing your system for clocking in and out of work is to apply all of the business processes and policies consistently.

You don’t want to make exceptions often, as this can undermine the success of your system.

Choose The Right System For Clocking In And Out At Work

Choosing the right system for clocking in and out at work is essential for the success of your business.

So many other parts of your business depend on those numbers that it would be counterproductive to create a system that didn’t integrate well with them.

Instead, choose an all-in-one solution to track employee hours that also offers advanced features, such as scheduling, task management, attendance reporting, payroll capabilities, communication features, and much more.

What is that solution? The Inch app.

We built Inch with the express purpose of simplifying and streamlining every aspect of your employee management activities — from time tracking to task management to team communication and beyond.

Inch also makes it possible for your employees to clock in and out right from their mobile devices so they don’t have to come into the office before heading back out into the field.

Inch can even help you keep track of their team by notifying you when an employee is running late or forgets to clock in.

Take your clocking in and out best practices to the next level with the Inch suite of team management tools.

For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit TryInch.com today.