Companies turn to time tracking software to address any of several needs. Some realize that the administrative hassles of managing paper time slips exceeds their ability to manage them and remain sane. Time tracking mistakes made when adding up time sheets also lead many companies to search for a more accurate way to calculate payroll hours.

Concerns about time theft can also spur the decision. "Time theft" describes the practice of over-reporting the amount of time spent on the job.

This can be as innocent as employees who round up the amount of time they have been at work or who stretch a break to last longer than scheduled. Even 5 to 15 minutes extra per day can add up to an extra week of pay per year per person. Multiply this cost across all your staffers and you can see how much it can affect your profitability.

Most companies find they need a time tracking system when they have about 25 employees they need to track. With basic time tracking systems now available for less than $1000, even smaller companies can find a time tracking system valuable.

Larger companies with more than 250 employees often turn to more robust time and attendance systems for their labor management needs. With these systems, you can not only track when employees log in and out, but also proactively manage your workforce. Critical decisions such as implementing elaborate scheduling rules, understanding workforce productivity, and forecasting HR needs into new business areas cannot be made without basic labor management analysis. Time tracking software creates a report profiling your company's human resources, helping you make the right choices for your business.

Not every company needs a time and attendance system, however. If your staff is primarily salaried, time sheets have been manageable, and you do not need detailed information on how your workforce spends its time, a time tracking system is probably more than you need.

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