It is no longer a strange adage “Time is money”. This perfectly sums up the importance of tracking time and converting it accurately for efficient payroll management in modern businesses.
With the rise of the gig economy and increasing focus on productivity, precision in time tracking is now crucial more than ever for us to know how to Convert employee’s time worked to exact minutes in other to prevent payroll problems in the future. It is also very important to provide accurate payment distribution to ensure your employees aren’t overpaid or even underpaid.
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The Significance of Timesheet Conversion in Modern Businesses
Tracking time spent on work activities and converting hours and minutes into a decimal format simplifies payroll calculations expressively. As per Market Research Future, the US economy loses a staggering 50 million hours in productivity every day due to unrecorded work activities.
Without proper timesheet tracking and conversion, quantifying the exact time spent on tasks becomes prone to errors that is why there is no better time to introduce a time card calculator to help your business not end up miscalculating billable hours. Why? Well, this can end up resulting in incorrect client invoices and payroll discrepancies.
To deal with this, making use of timesheet conversion to decimal form can minimize such errors and ensure smooth payroll processing.
Why Timesheet Conversion is Crucial for Hourly Employees
Converting scattered hourly workings into decimal timesheets provides an accurate and consolidated view of billable hours. This enables precise calculation of payable salaries without leakage or inconsistencies.
For instance, employees who are paid on an hourly basis, and calculating accurate payable amounts can be very challenging without proper timesheet conversion. Employees rarely work in perfect hourly blocks of 8 hours or programmed shifts.
The time spent on various work activities like meetings, calls, responding to emails, taking breaks, and working on projects can vary a lot on a daily basis.
According to a study by WorkPuls, unrecorded emailing activities alone can cost professionals nearly $50,000 annually in potential billable hours. Most employees tend to undervalue the actual time spent on email, which eats into productive work time.
Without tracking email time, professionals will end up working longer hours to meet project deadlines which leads to unpaid overtime and profit leakage.
Hourly workers may have different wages for regular hours versus overtime. Not having an accurate record of total time worked makes it difficult to quantify overtime projects correctly. Also rounding up or down work hours can short-change employees.
Steps to Accurate Time Conversion for Payroll
Keeping track of time should be a priority for any business that wishes to climb the success ladder. Most often unresolved conflicts arise during payroll processing, which has majorly caused setbacks in business, especially for small start-ups trying to get into the limelight.
To ensure error-free payroll processing for start-ups, companies, and businesses, below are explained specific steps for accurate time conversion:
1. Record Detailed Time Worked
Ensure to Note down the total time worked by the employee each day based on actual hours clocked in. Time can be tracked to the minute or rounded off to the nearest quarter hour. To this end ensure all employees are making use of the time tracker device introduced by the company to ensure accurate time calculations.
2. Convert Time Into Decimal Hours
Now this can be a little tricky, for that reason converting the recorded hours and minutes into decimal times by dividing the minutes by 60. For example, 8 hours 15 minutes becomes 8.25 hours. For half an hour, 30 minutes is 0.5 hours. This has to be done diligently to avoid any form of mistakes.
3. Multiply by Pay Rates
Once you have converted the employee’s time, it’s time to calculate how much you need to pay them. Take the employee’s hourly pay rate and multiply it by their decimal time.
For example, if an employee had worked 60.25 hours and is expected to be $20 an hour, you are expected to take 60.25 and multiply it by 30.
60.25 working hours x $20.00 = $1,205.00
The employee’s total pay expected from his employer is $1,205.00. before taxes and other deductions are removed. It is advisable for organizations and business owners to train the particular department responsible for this calculation on how to make use of the time tracker software provided.
4. Track Billable and Non-Billable Time
Billable client hours are described as the total amount of time an employee spends on a particular project. These hours are mainly charged to a client according to the agreed hourly rate. Therefore it should be tracked separately from internal non-billable tasks for accurate invoicing.
5. Summarize Weekly
The weekly Summary Report shows all Added daily decimal hours for the week to determine the gross payable amount. the hours each worker posted for each day in a week.
Also, the report should show the hours posted for each Pay Code to enable profitable calculations
6. Calculate Overtime
The formula used in calculating overtime pay is the non-exempt employee’s regular rate of pay x 1.5 x overtime hours worked. Any decimal hours exceeding 40 regular hours in a week should be marked as overtime for separate payment.
This calculation is different in states with different requirements. so get acquainted with the laws in other to avoid issues.
Accurate time tracking and conversion are critical as research by Alta metrics shows that time theft and inaccurate timesheets can cost businesses up to 20% of potential revenue, especially start-ups. Streamlined time-tracking procedures eradicate such losses in profitability.
Efficient Methods to Track Time for Payroll
Alongside timesheet conversion, choosing well-organized time-tracking methods is equally important. Let’s dive into this further as we explore common options including:
- Manual Tracking
this tracking system uses office time clocks to stamp work hours.it is also called the paper and pen method which has lots of advantages and disadvantages like inaccuracy and lack of details.
- Spreadsheets
Excel spreadsheet or Google sheet templates are the popular choice, which is done manually by inputting the time you started working and the actual time you finished a said project.
- Online Calculators
Using web-based timesheet converters like this time card calculator gives you an edge because, without time tracking calculators, employers overpay an average of 200 billable hours annually.
- Automated Software
Automated time tracking software is the method that helps its users easily track the time they spend on a particular project. Investing in integrated time tracking systems like Time Doctor for automated and real-time tracking involves using specialized software to track time, Speed, Automation, comprehensive reports, accuracy, etc.
Bottom Line
Timesheets are an important part of payroll management. Mastering time tracking and conversion into decimal format minimizes errors, prevents revenue leakage, and ensures accurate salary calculations, especially for hourly wages.
While manual calculations are prone to inaccuracies, automated time tracking software like Time Doctor offers businesses enhanced productivity, efficiency, and cost savings through precise time tracking.
Investing in robust systems and fostering a culture of workplace accountability are key steps to optimizing time management. For modern enterprises, smooth time tracking is crucial to sustaining business growth and profitability.
FAQs on Time Card Calculators
1. How can military time (24-hour clock) be converted to decimal time?
Military time first needs conversion into a 12-hour format before calculating the decimal hours.
2. How can timesheet fraud be prevented?
Automated time-tracking software minimizes manual tampering of timesheets. Strict disciplinary policies also deter fraud.
3. Can timesheets be used to evaluate employee performance?
Timesheets can indicate attendance and work hours. However, they may not reflect the qualitative aspects or productivity levels, especially for creative work.
