The Fifth Way: Records Management
We’re getting toward the end of our discussion of ways you can save money with an automated time and attendance system, but there are still a few ways left. This time let’s look at another of those ways to save that many business owners often forget: records retention.
Space, the Final Frontier
Wage and hour laws require you to retain payroll records — including records of employee time worked — for one to three years, depending on the kind of records. But to be safer in the event of a Department of Labor audit or a lawsuit, many experts recommend retaining these items for anywhere from seven to 10 years.
Now, stop for a minute and think about how many time cards or timesheets you use in a pay period. Then imagine storing 10 years’ worth. Even for a relatively small company, you could be talking about a file cabinet or two. For a larger company, it could be a whole room of file cabinets. Or two. Just to store payroll records.
Onsite storage can take up valuable floor space you could put to much better use. Offsite storage can get expensive. But tossing those records opens you up to significant potential liability in the event of an audit, lawsuit or other issue. So what can you do?
You could save storage space by scanning the records to electronic format. Of course, that would take a lot of staff time… time that could probably be put to more productive uses. In these days of lean staffing, it’s possible you don’t have anybody with enough spare time in their schedule to tackle that project anyway. You could hire an outside service to scan the documents for you, but that could cost big bucks — and few businesses these days have piles of spare money just lying around waiting to be spent.
Hope You’re Not Allergic to Dust
Then, let’s think about what happens if the Department of Labor does show up, announcing they’ve selected you (lucky you!) for an audit. Or you get a letter from a lawyer alerting you that a disgruntled employee has filed a lawsuit alleging she wasn’t paid properly. Yikes!
In either case, you’re going to need to produce the relevant time and attendance records and copies of payroll calculations. If your records are all on paper, you could spend hours digging through dusty, musty boxes of old records trying to locate all the information you need. Now, I don’t know about you, but this isn’t exactly my idea of a fun way to spend the day. Or I suppose you could simply give the investigators carte blanche to dig through your records themselves. (Note, I don’t advise this, and I suspect your lawyer would suffer an apoplectic fit if she thought you were contemplating it.)
Either way, having to paw through old paper records can make an already unhappy situation even more unpleasant.
Smaller, Faster, Cheaper
Now, imagine what it would be like if instead of paper-based time cards or timesheets, you used an automated time and attendance system.
First, your employee time records would already be in electronic format, and could easily be burned to a CD or copied to a USB drive or portable hard drive for long term storage. At the time of this writing, you can buy 1T (terabyte) hard drives the size of a small paperback book for less than $100, and the price is coming down all the time. Trust me, you can store a lot of payroll records on a 1T drive!
Instead of needing a bank of file cabinets or a couple of storage closets to hold your records, you could store 10 years of time and attendance records in a few square inches in one desk drawer.
The second bonus comes when you need to retrieve those records. With even a rudimentary system for filing the records, it should be relatively simple and quick to load up the disk, navigate to the desired file and either copy it to another disk or print it out.
There are many reasons why you might need to go back and pull old payroll records. Whether you’re looking up the information for a wage and hour audit, or retrieving data for an IRS inquiry, or responding to an employee’s question, you’ll get back to productive (revenue-producing) work much more quickly with electronic records.
Want to see for yourself how much you could save with an automated time and attendance system from Acroprint? Click here to calculate your savings.
If you’re tired of giving up valuable office space to store payroll records, or of sneezing your way through dusty boxes and files every time you need to look up historical information, check out Acroprint’s automated time and attendance solutions. Whether you’re interested in installed PC-based software or the security and convenience of a pay-as-you-go web service, all our solutions offer easy electronic records storage.