Today’s Hospitality business is facing a multitude of challenges. Not only are companies anticipating labor and wage increases, but there is a need to remain competitive in keeping talent. Turnover is a stark reality, and in order to keep and retain talent, there is a drive to provide competitive wages. At the same time, companies need to determine ways to reduce costs and streamline their operations as their margins start to get tighter and tighter. As a service industry, the brand power comes from the services delivered. The ability to deliver an experience is key to driving a repeat customer base and drives revenue. The experience is a combination of food, atmosphere and people – these elements are what drives the value of the business to the consumer. Companies looking to continue to deliver an experience need to find ways to streamline operations, especially in their personnel to gain efficiencies that can help realize profitability.
One of the ways to help reduce costs and mitigate risks is to build intelligence into their payroll management system by connecting time collection.
Time Collection is only half the battle
For companies in the food service industry, the workforce runs on the ability to accurately manage and track schedules. This is not only from a human capital perspective, but also from a calculation perspective. Most companies have a strong ability to manage and set their schedules, but the challenge is ensuring that the proper calculations are set. This means wages, tips, meal credits, taxes and other calculations. Even if you have a system that can do this, the issue becomes one of when it’s time to compile all this into the payroll management system. you want to ensure you have a process that has the ability not only to collect the time worked by the employee, but have that information integrated and passed over to the payroll system. Most Time Collection systems, whether Point of Sale (POS), time clocks, or mobile/web tools, do not have the best practices to create this connection.
Connecting Payroll Management Systems and Time Collection
It’s important to not only have a payroll management system that provides this connection, but also to have a payroll management system that provides the proper intelligence to run the payroll properly.
When you connect the payroll management system to your time collection system, you are effectively eliminating the administrative overhead that revolves around the transfer of data. In many cases, manually entry not only takes a great deal of time, but you run the risk of errors and potential noncompliance.
Payroll management can be a complex process. There are various elements that are tied to the payroll, which can vary from one employee to the next. Risks arise when you have to manually calculate wages against hours worked, the necessary deductions required for taxes, benefits and additional wages (such as 401K). Any wages, tip credits, taxes, benefits deductions and overtime need to be calculated properly, in order to maintain regulatory compliance. Look for a solution that provides that level of integration and gives you the ability to connect time and labor with payroll. Without having a system that connects the employee rates to the payroll, you run the risk of errors or failed entry of wages. This not only poses a risk to employees’ getting paid but can also run into compliance risks with failure to accurately record taxes or benefits. You want a system that provides you with the intelligent business rules to automatically run payroll against the current employee rates.
The biggest challenge becomes being able to accurately track the employee wage rates, taxes, and credits that need to be accounted for. Minimum wage changes, or properly calculating tip credits, overtime, and how this is taxed can be a complex process, and noncompliance to this can result in costs associated with time to process or failure to record wages properly, which can result in penalties you cannot afford.
Failure to report time with earnings can result in fines or penalties that you want to avoid in your operations.
Time Collection and Payroll Management Systems bridge the Gap
When you integrate your Time Collection to Payroll Management systems, the benefit not only becomes one of eliminating administrative overhead. It certainly takes the manual process of “truing up” time worked to time earned, but it also creates a level of risk mitigating when it comes to compliance. Payroll Management Systems that are designed to flag non compliant errors, just as employees below minimum wage help to alleviate any wage discrepancies that a Time collection system may not catch.
The Combination of your Time Collection System with a Payroll Management System that has a risk-based approach to payroll management is the key to streamlining operations, creating a seamless operation for employees, and connecting time worked to time earned in a compliant manner.