Cost Justification

Not only in our opinion, but foremost today, all expenditures in data processing must be able to justify their costs by either increasing revenue or reducing expenses. Time and Attendance justifies itself by reducing the effort and expense in calculating gross payroll expenses and by providing the means to avoid unnecessary labor costs by avoiding overtime and providing a database of historical data used in labor cost projections.

The following example is a conservative estimate of savings related to a fictional company that employees 500 people, has an average hourly payroll rate of $10.00 and is currently calculating time cards by hand gathering time punches with mechanical time clocks. The estimates are derived from various published statistics, notably the American Payroll Association.

Clerical Cost Reduction
  • Cost of Payroll Clerk per Hour: $13.00
  • Time used to calculate one time card: 10 minutes
  • Cost for one card $2.20 (13.00/(10/60))
  • Cost for 500 employees for weekly payroll: $1,110.00
    • (500 * 2.20)

Human Error Elimination

  • Error rate of miscalculations:.005
  • Weekly Payroll for 500 employees, 40 hours at $10/hr: $200,000
  • Costs for 500 time cards: $1,000.00 (200,000*.005)

 

 Savings from Implementing Consistent Payroll Policies

An average of 6 minutes per day is lost due to incorrect rounding and inefficient application of payroll rules such as grace periods. This results in over $4,000.00 per week savings ((6/60*10.00*500)*5 days)

Total Savings per week: $6,110.00

Compare this to the cost of the system, the time spent training personnel, installation, hardware, time needed to run the application and various miscellaneous expenses and you'll find most QUE Accounting Time and Attendance systems have a payback period less than 6 months.