Daycare Finance

In Time and Attendance systems time clocks can be equipped with a variety of card readers. If we go back more than 5 years ago bar-code cards were not unusual but in today's market the Radio Frequency Identification Device (RFID) has become the preferred technology . Most of  these RFID devices are the passive type consisting of a chip containing a small integrated circuit used for storing and processing information and and a tuned antenna fro receiving and transmitting data. When an external transmitter is near the RFID tag it become active more or less powered by the external antenna  

RFID devices are fitted to an increasing number of products particularly in the security industry. They are used to protect goods in retail outlets, they are fitted to consumables in printers to ensure that genuine ink cartridges are used, the are used in access control applications to open doors. They are extensively used in the time and attendance industry where employees carry an RFID card or tag to clock in and out each day. The common name for these devices is a proximity time clock or RFID time clock.

Most end users would agree that RFID cards are simple to use, almost indestructible, safe, relatively inexpensive reliable and very convenient. They do however, come in a range of formats which generally do not impact performance but they do impact cost, cross application compatibility, ease of use and availability. Formats include proprietary offerings which are only available form certain manufacturers such has HID and Indala  and some which use an international standard such as the Mifare Smart-card.

When you are considering a time and attendance system for you business the product you use may be impacted by your current or intended use of security and access control systems . Your new time and attendance system should use RFID cards that are either compatible with your existing security system or it should use one of the more easily accessible RFID card systems.

It is almost certain that you will be able to find a time and attendance supplier using the same RFID Technology but you are more likely to find it an easier task if you are using an HID (who also make a mifare product) or Indala system. Because there are multiple options within the same technology provider  you will need to provide the time and attendance provider with a sample of your card to make sure their equipment can read the card. Once they have established suitability you can be confident that the systems will be able to use existing cards or tags which is both a convenience and a cost saving

If your security provider uses Mifare cards this will make the choice of time and attendance provider more complex due to the programmable nature of Mifare cards. Mifare cards are formatted with a number of programmable sectors depending on the memory capacity of the card. These sectors require a special secure electronic key to open and encode the sector and also to read that sector again. This is where the compatibility issues start. Your supplier of time and attendance will have to be able to specify the sector to which it writes and you current cards must be of sufficient capacity to take the encoded information for both the security and time and attendance systems . Unless your both applications are from the same provider they will not be able to access any sector encoded by the others hardware. If your applications are form different suppliers it is almost certain that they will not be able to access each others hardware.

Mifare cards are the new standard and their flexibility is certainly an advantage. You can encode quite a lot of information on a Mifare Card. In a recent application my colleagues facilitated the process of including staff time and attendance, security access control, car parking station access, canteen credit and employees medical records data on the same card in a large metropolitan hospital.

If you intend using and RFID solution for your time and attendance and this is the only current business system using this this technology, you canlt go too far wrong with HID or Indala . You will certainly be able to add access control later and not get caught out with odd standard. You may also use Mifare Card but you would be wise to opt for one of the larger memory sizes such as 4K to allow for expansion to other products.

The last factor to discuss is the cost of these technologies. While none of the  RFID technologies is expensive to produce there can be quite a significant variation in cost. HID  and Indala tend to be more expensive and it is rare to see much variation in price from your solution provider because their cost is fixed. Mifare cards by comparison are generally purchased unencoded at a very low price and then encoded by the solution provider and this provides a greater degree of flexibility.

One final tip...the price of the cards you buy will almost certainly go up once you have purchased the system. The salesman will almost certainly give some away to secure the sale so  negotiate for additional cards of tags when you purchase and you will save yourself hundreds of dollars in a very short time.

James Bell

Time and Attendance Consultant

Current, the most popular biometric technology used in  time and attendance is the fingerprint time clock. Essentially, the technology uses a reader which measures a number of points on the user's finger and constructs a algorithm ( a mathematical representation) and then stores this as a user template. It is true that biometric time clocks do not store actual fingerprint images so, from a user privacy perspective, there is no need for concern regarding any possibility of reverse engineering a user template into a complete fingerprint .

There are basically three types of readers used in fingerprint time clocks. Currently, the most popular is the optical , although from time to time the ultrasonic and capacitance readers have enjoyed greater popularity. There are also two recognition methods used. Verification method requires the employee to enter their ID number first and then place their finger on the reader . The reader then "verifies" that the finger belongs to the user . This method is easiest and the most common. The second method is identification in which the user simply puts a finger on the reader and the device "identifies" the user from the template database.

The most important specifications and benchmarks used with biometric time clocks including the False Acceptance Rate (FAR), the False Rejection Rate and the (FRR) the Equal Error Rate (ERR). Technical specifications aside the most important factor when considering a fingerprint time clock is how often will it stop any of your employees from clocking in or out. This is in fact where fingerprint time clocks can let you down.

In most case, implementation of fingerprint time and attendance the motivation behind the introduction of a more secure technology is some mistrust of the employees. Biometric time clocks should completely remove any employee misrepresenting their working hours of clocking on for their (buddy punchimg) . In this environment employees will not always be as cooperative as might hope and may take any chance to buck the system. So, if your fingerprint reader does not work very reliably for all you staff you may end up having to allocate a number and password option for one or two employees. Almost immediately you will find other employees will start having problems as they realize the system is flawed. This is why your chosen biometric system must work for all employees.

Equally important to your business is how quickly employees will be able to clock. Imagine For example: If you have 100 employees using the same clock and the workday ends at 4:00pm. Employees are lined up at the time clock and each employee takes a total of 5 seconds to clock out. That's a total of 8 minutes until the last employee can clock out. It wont take long before your employees are complaining about the waiting time and either stopping early or hitting you up for overtime.

There are some great resources on the web if you want a greater understanding of the technical and operational considerations for fingerprint bundy clocks but essentially there a few guarantees that you want to obtain from your supplier: It will work virtually first time every time for all employees and all employees will be able to clock in and out in a reasonable time.

After all, you want the system to save you money and difficult to administer systems will do just the opposite

James Bell

Time and Attendance Consultant

Should you be hiring Derek Acorah to be doing your fixed asset accounting?Is the most important piece of equipment for inventory management a Ouija board rather than an RFID system? Provided you are a professional with years of experience and access to the latest software-driven inventory management systems you can readily determine the value of assets that you can locate and inspect. The key word or phrase here though is "locate."

Asset tracking is probably a mixture of art, science and skill, but all too often, without access to the nether world, it can be difficult (if not downright impossible) to find assets that are listed on a property ledger. [Read more →]

Sarbanes- Oxley is certainly all-pervasive in US business, but now it seems to gaining a distinctly spiritual dimension too! That doesn't mean you should hire a medium for your accounting team, but rather be aware of the implications SOX will have when it comes to fixed asset tracking. The current attention on the accuracy of the balance sheet and a possible move to further disclosures about the fair value of assets means that US companies will have to get serious about internal controls over fixed assets in the next few years. [Read more →]

Home daycare businesses must practice not only good record keeping, but appropriate record retention.  Holding on to clutter is never a good thing. However, if a business discards its records too soon and gets audited by the Internal Revenue Service, it could prove to be a very expensive mistake. How long should a daycare business hold on to records?

In general, daycare businesses must keep their records for as long as they are important for any tax law. This is usually the later of the following dates:

• 3 years from the return due date or the date filed.
• 2 years after the tax was paid.

It is, however, advisable to follow the guidelines for record retention recommended by Kathleen Kansfield, CPA and Martin Freeman, CPA for home daycare businesses:

For a minimum of 7 years keep records of:

• Bank statements
• Canceled checks
• Deposit receipts
• Payment receipts
• Attendance reports
• Bills

For a minimum of 4 years, hold on to:

• Payroll records

Never throw away:

• Copies of your income tax return
• Audit reports from the IRS and any related correspondence
• Information related to home purchase and improvement

If the IRS does happen to audit your tax return, most adjustments occur in the following areas and require the following records:

• Gross receipts: Bank accounts and Federal food program reimbursement records
• Food expenses (remember that you cannot deduct food for your family, this is a nondeductible personal expense)
• Food reimbursement
• Automobile expense: automobile mileage diary
• Business use of the home: square footage of your entire residence and portion used for your business; daily records
• Other expenses:  receipts for supplies and miscellaneous expenses
• Independent contractor versus employee issues (with regard to withholding or paying taxes on compensation)

The Internal Revenue Service‘s “Child Care Providers Audit Technique Guide” provides solid guidelines for record keeping and retention. Record keeping can be simplified through the use of childcare software such as ProCare or Daycare Information System Plus which helps businesses manage, store, and retrieve accounting and business information.

About the Author

Carla Snuggs is a freelance writer from Southern California. She holds a Bachelor of Arts degree in Family and Consumer Science with an emphasis in child development and also holds a Master of Library and Information Science degree.