Attendance as the Silent Cost Controller (Payroll Manager Perspective)

By K. A. Davies for Payroll Leadership Institute of Australia

When most business leaders talk about cost control, the conversation tends to circle around suppliers, utilities, or even cutting back on marketing. Payroll rarely gets a mention beyond “keep overtime down.” But I’ve learned – sometimes painfully – that attendance data can make or break your labour budget.

At one point, our wages were consistently overshooting by 3–5% each pay cycle. Nothing dramatic, but enough to raise eyebrows. When you multiply that by 26 pay periods in a year, it adds up quickly. For a business with a $2 million annual wage bill, even a 3% leakage equals $60,000. That’s a full-time salary wasted, purely through poor visibility of attendance.

Digging into the details, three silent killers kept showing up: off-site clock-ins, stretched breaks, and manual timesheet edits. Fixing those became the turning point for getting payroll under control.

Mobile Clock-In with Geofencing

Buddy-punching – one employee clocking in for another – sounds like something out of the 90s. But it’s alive and well. In fact, a 2017 study by the American Payroll Association estimated buddy-punching affects nearly 75% of businesses, with costs running into billions globally. 

In Australia, even small-scale versions can be devastating. If two staff clock each other in early by just 10 minutes each day, you’re paying for 86 extra hours per employee over a year – essentially two weeks’ wages for nothing.

We had our share of “I’ll clock you in while you park the car” situations. It didn’t feel like theft to the team – just a little convenience. 

From casual clock-ins to precise on-site verification

But when the team introduced a new workflow of mobile clock-in with geofencing, that habit ended overnight. Staff could only start their shift if they were physically inside the site perimeter. Suddenly, the hours on the roster matched the hours in payroll, and our weekly reports showed immediate savings.

The added benefit? Compliance. Under the Fair Work Act, accurate records of start and finish times are a legal requirement. Geofencing gave us confidence that our records weren’t just tidy – they were defensible.

Break Management

Breaks were another blind spot. Nobody was deliberately stretching them, but “five minutes late back” became common. When 20 staff are each paid for an extra five minutes a day, that’s 100 minutes of unworked time every shift. Multiply it across a year, and you’re looking at over 8,000 paid minutes, or 133 hours.

Automated break management brought discipline without micromanagement. The system enforced start and finish times, ensuring staff got their proper entitlements – no more, no less. The conversation shifted from “Did you track your break?” to “The system logs it for you.” That took pressure off supervisors and avoided those awkward “you owe us 10 minutes” conversations.

It also protected us from compliance risks. Fair Work audits often scrutinise break entitlements, especially in industries like hospitality and healthcare. By automating break records, we eliminated a potential weak spot.

Timesheet Automation

The final piece was timesheet automation. Before, supervisors manually approved and adjusted hours. Even with the best intentions, people rounded up, ignored small discrepancies, or simply made mistakes. 

A 2020 PwC report on workforce costs found that manual data entry is one of the top five causes of payroll leakage, with error rates as high as 1–3% of total payroll.

When we switched to automated timesheets, the actual clocked hours flowed straight into payroll. Manual edits became the exception, not the rule. That alone stopped the “hidden overpayments” that had crept in unnoticed.

From manual edits to error-free automation

The effect was twofold. 

First, we cut costs by aligning pay with real work. 

Second, we boosted trust. Staff no longer questioned adjustments or worried about missing hours. Payroll disputes dropped significantly, and managers gained back hours each week that used to be lost chasing timesheet corrections.

The Bigger Picture

What surprised me most was how quickly these small attendance tweaks added up. Within a quarter, labour costs stabilised, and the variance between rostered and paid hours shrank to under 1%. That level of accuracy meant we could forecast with confidence – something investors and owners love to see.

It also improved culture. Employees saw that everyone was being treated fairly. No one was being shortchanged, but no one was gaming the system either. Transparency built trust, and in turn, engagement.

For Australian businesses, where wages are often the single largest expense – typically 50–70% of operating costs depending on the industry – these improvements aren’t optional. They’re essential.

My Takeaway for Payroll Leaders

Attendance isn’t just an admin function or a compliance requirement. It’s a frontline cost control mechanism that protects both your bottom line and your people. By tightening up mobile clock-ins, enforcing fair break times, and automating timesheets, we turned payroll from a cost risk into a cost advantage.

The lesson? Don’t wait for a budget blowout to act. Treat attendance as seriously as you treat revenue. Because the dollars you save through accurate attendance are the easiest, cleanest dollars you’ll ever put back into the business.