Time reporting requires the highest level of resource commitment compared to all other payroll-processing activities, even at top-quartile companies, says Hackett, yet opportunities for significant savings through automation of the front end of the payroll process definitely deserve attention.

Looking at two best practices -- enabling direct-entry of employee time and assigning accountability for the accuracy of time data to the field level -- Hackett analysts were able to identify an opportunity gap of $280,000 per billion in revenue.

Hackett's white paper, Automation, Other Best Practices in Time Reporting Offer Significant Savings, identifies several time-reporting best practices:

• Consolidation to fewer time-reporting systems
• Reduced number of payroll time codes
• Standardized payroll time codes
• Accountability for accuracy of time data established at field level
• Enablement of employee direct-entry of time data
• Front-end validated edits built into time-reporting systems
• Elimination of positive time-reporting for professional employees
• Elimination or reduction of positive time-reporting for hourly employyes.
• Post-approval of time data

According to Hackett, "whenever and wherever companies can enforce employee ownership and responsibility for the entry of the time data, significant savings can be achieved." A survey by Hackett shows that 44 percent of businesses have completed and implemented employee direct-entry or are in the process of doing so, and 31 percent are considering its implementation.

However, "putting the tools required for direct-entry of time reporting into employees' hands is particularly difficult in widely dispersed organizations."  The challenges include:

• A common set of data between HR and the general ledger (GL), where the two are in agreement on a common vision to automatically integrate HR and GL systems.
• Overcoming resistance by employees unused to front-end validation edits and accountability at the field level.
• Matching technology with the employee base, such as when the employees lack access to PCs, or training employees who have little experience with computers.
• Significantly increased error rate at companies that maintain time-entry and validation activities within the payroll department.

For more information: www.thehackettgroup.com