Timekeeping Reports

A good timekeeping report that is designed to correct data entry errors should not present the entire (and, likely, voluminous) list of all employee times recorded in the current period, but rather just those that clearly require correction. These can be targeted at hours that are too high, entries with missing information, overtime, or hours worked during a weekend. A computer program can be created to sift through all direct labor data, pick out possibly incorrect data, and present it in a report format similar to the one shown in Exhibit 2.2.

In addition to error correction, it is also important to devise a report that lists expected direct labor hours for various functions and compares these hours to those actually incurred. By doing so, it is possible to see where operations are being conducted inefficiently or where the underlying standards are incorrect. The budgeted labor information is most easily obtained through a manufacturing resources planning (MRP II) system, which compiles from labor routings and the production schedule the hours that should be worked each day, by workstation. The budgeted labor information for this report must otherwise be compiled manually. An example of the report is shown in Exhibit 2.3.

Normally, there is no budget in the accounting system for the hours worked by each employee, since this requires an excessive degree of effort to compile a budget; furthermore, it must be recompiled every time employees leave or join the company. Instead, you can create a trend line report of hours worked by each employee, which is useful for determining any tendency to work an inordinate amount of overtime or to work less than a normal amount of hours. The example shown in Exhibit 2.4 covers only a few weeks, but this report can be reconfigured in landscape format to show the hours worked by employee for every week of a rolling 12-week period. Another approach is to report employee hours by month instead of by week, which makes it possible to fit the hours worked for an entire year into a single report.

As illustrated in Exhibit 2.4, it is also useful to include a column that identifies the department in which an employee works, for overtime utilization frequently varies considerably by department, given the different workloads and capacities under which each one operates. By sorting in this manner, you can readily determine which departments are consistently under- or overutilized. In the exhibit, it is readily apparent that the Lathe Department is being overworked, which will require the addition of more equipment, more personnel, or both.