The true cost of late timesheets
International auditing corporation, KPMG raised industry eyebrows – when it announced plans to start fining workers in the UK who submit late paperwork. This means that any KPMG employee who misses the deadline for sending their timesheet over could be liable to pay $180.
Under the Australian Fair Work Act, employers are required to keep accurate records of all time worked for each employee and have their employees submit timesheets. But how much does it cost for those who forget and lodge late. In Australia employers cannot legally withhold pay from employees who fail to submit timesheets, but how can they know what they are legally required to pay without these timesheets?
Many businesses have put in place policies that state if timesheets are not submitted by cut-off time that the pay will be withheld until the timesheet is submitted; this is a short term solution that causes more work for the future. Recruitment companies will need to run an extra pay cycle for that person who is late or they will hold the pay until the following pay run.
These late timesheets are costing you more than you think…
When KPMG announced its crackdown on admin deadlines, a spokesperson confirmed that the company is “aiming for a 100% on-time completion rate and has informed all colleagues why timesheets are important.” The organisation is not alone in prioritising timesheets, either; although fellow consultancy Ernst & Young does not fine its team for missed deadlines, a representative commented that “EY has a culture where people understand the importance of submitting timesheets.”
But while getting all paperwork approved in a global organisation is complex, the job is sometimes even harder for recruitment agencies. You are trying to process submissions from multiple companies, and dealing with external contractors who don’t see or realise the impact of turning something in ‘a bit late’. If your team turn a blind eye to this behaviour, it can start to impact your bottom line.
One reason that administrative efficiency is so important to recruitment agencies is the sheer volume of paperwork you need to process. Every single week you are dealing with potentially hundreds of timesheets – many of which are submitted in different formats – that need to be reviewed, approved and converted into client invoices.
Just one outstanding timesheet can slow this chain of activity down, resulting in a delay in sending paperwork over to clients. Your team may need to chase the contractors responsible for this hold-up over email and phone, which gets in the way of the other, more valuable tasks they could be doing. And even when the missing timesheet does arrive, it may still need manual checking and reformatting before its ready to be sent for remittance. All in all, it’s a massive waste of staff productivity.
Far from just an inconvenience, however, late timesheets can have a serious impact on your recruitment agency’s profitability. If paperwork is not submitted in time for your team to create an invoice, it may result in a client’s payment window being missed.
While some companies are kind enough to push the odd late payment through at any time, others have a stricter remittance policy and will not settle your invoice until the following week or month. This can have a significant impact on your company’s cash flow, as contractors will still need to be paid even if the client hasn’t settled your invoice.
Depending on the client’s payment terms, you may find yourself out of pocket for a long time – and this deficit will prevent you from doing all the activities you want to carry out in order to grow your business.
One final fallout from timesheet problems, which shouldn’t be underestimated, is the impact it has on your reputation. It’s not only your cash flow that relies on promptness; your clients also have books to balance, and that means knowing when supplier invoices are going to come through.
You don’t want to become known for grovelling to the accounts department each month, as you submit late invoices once again. If you can’t demonstrate administrative efficiency your clients may start to wonder what else you can’t get right – and feel less keen on working with you in the future. These seemingly small processes added up to the overall impression you create, and contribute to your professional reputation.
Recruitment agencies don’t have endless hours to spend chasing and formatting timesheets, which is why many companies are turning to technology to solve paperwork problems. The right back office software can automate key administrative processes, to save time and effort, but more importantly make sure invoices are submitted well before client deadlines.
Recruitment back office technology works by establishing rules and regulations around how contractors can submit timesheets in the first place, so they are always in the right format for that particular client. It will automatically chase outstanding documents as the submission deadline is drawing closer, before collating key information and creating invoices on your behalf.
All that’s left for you to do is share that invoice with the client and wait for payment. It’s the ideal solution – and there’s not a fine in sight.
ETZ is a leader in recruitment back office software. Book a demo to see how we can improve your timesheet approval process to ensure you get paid promptly.
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The best way to see ETZ is with a quick online demo. We’ll show you how you can reduce paperwork and save up to 85% of your agency’s back office processing costs.
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