PAYROLL. AS A BUSINESS OWNER, IT'S your single biggest expense. More
than gas, more than materials, more even than equipment, your heftiest
expenditure is labor. Beyond that, it also eats up a great deal of time,
and requires an enormous amount of paperwork.
Even if you've crunched the numbers correctly, there's still no guarantee that the numbers were right to begin with -- even the most honest employee can't always remember how long he took for lunch last Tuesday when he's filling out his time card a week or two later.
Legends Landscaping in Sparks, Nevada, knew there had to be a better way. "The manual efforts payroll required twice a month were getting to be unmanageable," says Dan Ivens, chief financial officer. "There were so many hands in the cookie jar. We were going to have to start outsourcing our payroll, which would have been yet another ongoing expense." The company was also frustrated that its job costing wasn't as accurate as it could be. The search was on for a solution.
Ultimately, the company was referred to Exaktime of Woodland Hills, California, the maker of The JobClock System, an automated time-tracking and payroll system. "We were skeptical at first, but it won us over pretty quickly," Ivens says. "Payroll wasn't a headache any more. It was easy."
The system utilizes a number of small time clock units about the size of a tape measure. Each one is padlocked down at a different jobsite, and each worker is given a set of Keytabs for his key ring -- one green Keytab, and one red. When a worker arrives onsite, he touches his green Keytab to the JobClock unit, and is clocked in. When he leaves for the day, he touches his red Keytab to the unit, and is clocked out. The rugged little JobClock -- weather-proof and built to withstand the tough conditions of a construction area -- stores the clock-in/clock-out information for each worker until it's time for payroll.
At that point, a manager can go to the JobClock and wirelessly download the stored information into a Palm Pilot, which can then upload the information to a desktop computer. With a few clicks of the mouse, the computer can spit out detailed, accurate attendance reports for each employee, streamlining the payroll process. It's that simple.
"The more complicated your attendance system is, the less compliance you'll have," says Scott Prewett, vice president of business development for Exaktime. "We wanted our system to be as easy as possible. The Keytabs are green for go and red for stop -- it's universal."
Even the software programs for the Palm Pilot and desktop computer aren't complicated -- the buttons on the main screens are large and clearly labeled with short phrases such as 'Collect Records.' It's hard to make a mistake.
Legends found the system to be so accurate and easy to use that they wanted to expand it to help with their job costing, in addition to their payroll. They now have ten cost codes in the field -- irrigation, planting, water feature, etc., -- and each has a corresponding, color-coded keytab. When an employee starts working on the irrigation system, he touches the irrigation Keytab to a JobClock unit, and touches it again when he's finished. The unit keeps track of what jobs were performed, and how long each took.
"We're not just relying on our workers to remember what they worked on during any given day," Ivens says. "We now know exactly what they're doing in the field, and can compare that with what we budgeted the job for."
The system has even allowed the company to lessen its payroll by controlling overtime. It's been programmed not to pay workers for more than 40 hours a week, so it's no longer worth it for crews to try to accumulate more than that. This decrease in payroll is typical of automated time-tracking systems in general: the American Payroll Association estimates that switching from paper time cards to an automated system lessens a company's payroll by an average of about nine percent.
Legends has now switched all of its divisions over to JobClock, except for two. One division that still uses paper time cards is the maintenance division, which the company is phasing out, and the other is the trucking division, which the company plans to change to an Exaktime system as soon as possible.
"We have a handle on overtime, aren't outsourcing payroll, and are job costing more accurately," Ivens says. "The system has easily made up its cost, and then some."