Electronic time tracking saves money and resources

An electronic time tracking service achieves many benefits, one of which is the direct financial savings that a functioning work time tracking system brings to the company.

We have done the calculations below to try to illustrate typical situations where a company can make savings by switching to electronic time tracking. However, it is worth keeping in mind that the greatest benefit in improving the efficiency of operations can come from exactly what the saved time is spent on. What is more difficult than the example below is to put a precise value on the benefits that accrue when an entrepreneur frees up extra time to gain a new customer. Or if the HR manager has time to focus more on new recruitment. In other words, many of the benefits provided by the Duunissa service are qualitative and company-specific.

“The Duunissa time tracking service has made our operations considerably more efficient in terms of work time tracking and payroll calculation. As an entrepreneur, I feel that Duunissa removes an entire working phase from myself and gives me more time to do other things.”

Jonna Jääskeläinen, Kontrasti Oy

Where do savings come from?

Our example company:

  • Construction Ltd
  • 10 employees
  • Wages of the construction worker, including fringe benefits, EUR 20/h Working time 7.5 h/day
  • Wages the administrator, including fringe benefits, EUR 30/h
  • Hourly rate invoiced by the company EUR 60/h

Time savings for employees

Construction Ltd previously recorded working hours on paper. On average, it takes an employee 10 minutes per working day to record their working hours. In total, the employee uses working time for working hour entries approximately 3.5 hours at the monthly level. As the employee’s wage costs are EUR 20/h, the employer pays wages for the performance of the work time tracking:

  • Approximately EUR 70 per employee per month.
  • In a company of 10 employees, EUR 700 per month.

Of course, making clocking entries also takes time when done through the time tracking application, but we have calculated that electronic time tracking reduces the employee’s time consumption by 90% at best. In our example company, for 10 employees, this brings savings:

  • EUR 630 per month.
  • EUR 7,560 per year.

Savings in payroll and financial management

Collecting and recording paper hourly notes is a monthly process that also takes time and resources in the company’s payroll and financial management. Hand-filled hourly tracking notes may not arrive on time and there might be a need to separately request them. Under the GDPR, documents containing personal data should not be sent by email. Finally, the hours must first be entered into the electronic format manually and added together.

In our example, in a company with 10 employees, it takes an average of one hour per month to process one person’s working hours accrued during the month. This makes a total of 10 hours per month. In electronic time tracking, the data of the work shifts can be found immediately in the cloud service, and the system automatically adds up the hours. Reports can be sent directly to payroll. We have calculated that this will save 9 hours of administrative time per month and 108 hours per year.

For example, time saved in an entrepreneur-led company can be used for calculating quotations, developing operations, tendering suppliers or other similar activities, which can bring significant income and savings to the company on an annual basis. If the administration is managed by a salaried employee whose salary, including fringe benefits, is EUR 30/h, the following savings can be calculated when using an electronic time tracking application:

  • EUR 270 per month.
  • EUR 3,240 per year.

Is all completed work always invoiced?

With the help of the Duunissa service, working hours can also be monitored project- or customer-specifically. The company can also specify that all marked working hours should be marked for a project. This effectively prevents the work done from not being invoiced.

Our example company uses an hourly rate of EUR 60 for its invoicing. Even small streams can generate a lot of uninvoiced turnover, as the following example shows. The 10 employees of Construction Ltd forget to log a total of 3 hours per week due to manual clocking entries that are often made retrospectively. This may sound like a lot, but in percentage terms, it means 0.8% of the weekly working time of all ten employees. Uninvoiced work is carried out for 13.5 hours per month, resulting in a loss of turnover:

  • EUR 810 per month.
  • EUR 9,720 per year.

When the hours worked are immediately ready for invoicing on a project-by-project basis in the cloud service, the invoices can also be sent to the customer on time. Payments are received more quickly and the company’s cash management is improved. When a company specifies in its settings that hours worked should always be marked for a project, it reduces the risk of oversights and work done is not left uninvoiced.

In addition to working hours, the Duunissa service can also record products and supplies used on a customer- or project-by-project basis. The employee remembers to do this when they mark their use at the end of each shift, rather than at the end of the month. Oversights are also prevented for products, which ensures that they are invoiced correctly.

The introduction of the Duunissa work time tracking service can create savings for Construction Ldt on an annual basis:

  • Acceleration of employees’ clocking entries: approx. EUR 7,500
  • Time savings for administration when handling hour entries in paper form: approximately EUR 3,200
  • Hours not invoiced: approx. EUR 9,700

In total, annual savings may be approximately EUR 20,000. The Duunissa work time tracking service is therefore a profitable investment.