​We have to admit, autumn is one of the best times of the year. The leaves are vibrantly colored, the air is crisp, and the holidays are just around the corner. 

However, as the fiscal year draws to a close, many staffing agencies brace themselves for one of the most crucial and demanding back-office processes: the year-end audit. 

Your auditor’s job is to provide an independent opinion on your financial statements, payroll, and timesheets. And the strength of that opinion hinges on one thing: accurate, up-to-date time records. 

These records support the financial reporting process and provide a detailed trail of hours worked, overtime, and leave. Discrepancies can lead to adjustment requests, penalties, the risk of non-compliance, or a tarnished reputation.

Fortunately, prepping time records for your year-end audit doesn’t have to be a complete nightmare. We’ll save those for Halloween. With the right systems, controls, and practices in place, you can transform an audit from a nerve-wracking event into a routine checkpoint. 

Here’s how to prepare, and why Timerack is a strong ally in this effort.

Why Accurate Time Records Are Crucial for Audits

Accurate and error-free time records are the backbone of effective audits. They provide primary evidence for verifying a staffing agency’s payroll costs, labor expenses, and compliance with federal, state, and local wage laws.

Some of the top reasons record accuracy is critical for year-end audits include:

  • Supporting Financial Statements and Payroll: Auditors verify that the pay records corresponding to expense lines are accurate. If hours don’t reconcile or documentation is missing, it can lead to adjusting entries or qualified opinions.
  • Labor Law Compliance: The Fair Labor Standards Act (FLSA) and other federal, state, and local regulations require employers to keep detailed records of hours worked, especially for non-exempt employees. Your audit evaluates compliance with these rules. Failure to do so can result in back-wage payments, fines, and even legal action from federal agencies, such as the Department of Labor.
  • Fraud Detection: Audits can identify red flags of fraud, including timesheet manipulation and buddy punching. Accurate time records deter fraud, protect margins, and demonstrate strong internal controls.

Your Audit-Ready Checklist 

Use this quick checklist to ensure your time records hold up under audit scrutiny.

  • Documented Time Policy: Maintain a written policy for punch rules, grace periods, breaks, rounding, and overtime.
  • Consistent Application of Rules: Utilize system enforcement, not manual fixes, to ensure rules are applied uniformly.
  • Punch and Audit Trail Data: Keep automated logs of edits, approvals, notes, and exceptions.
  • Approver Review and Audit Checks: Conduct a weekly or monthly review of exceptions with supervisors.
  • Time and Payroll Reconciliation: Ensure that timesheet totals match payroll inputs before the end of the year.
  • Backup Original Records: Maintain archival access to raw punch data and reports.
  • Exception Handling Workflows: Set up automated alerts for missing punches, late entries, and other issues, and require justification for any exceptions.
  • System Integration: Sync your time system with payroll systems to ensure data flows smoothly.
  • Employee Training and Support: Provide your team with training, job aids, or help desk support to ensure they clock in and out correctly. 

 If you check off everything above, you’re well ahead of most staffing firms when audit season rolls around. 

How Timerack Makes Your Records Audit-Ready 

Timerack is designed with the complexities of staffing agencies in mind. Our solutions ensure accurate, audit-ready time records through:

  • Alerts and Management: Our software flags missing punches, overtime events, break violations, and other anomalies to ensure compliance. Supervisors can quickly review and resolve these exceptions before they escalate into a larger issue during audit preparation.
  • Seamless Payroll Integration: Reduce manual errors and reconciliation issues by integrating our time-tracking solutions with your existing payroll software.
  • Fraud Prevention: With location tracking and biometrics, you reduce the risk of buddy punching or off-site clocking.
  • Flexible Reporting: You can generate historical reports by pay period, assignment, employee, or client, covering periods of months or years. We ensure you’ve got the documentation auditors will demand. 

Fall into Easier Year-End Auditing with Timerack 

Year-end audits don’t have to be a scramble. With the right infrastructure and discipline, they can become a predictable, low-stress process that reinforces internal controls and gives you complete confidence.

Timerack helps staffing firms maintain consistent, auditable time records through automation, integrations, exception management, and clear data trails.

This autumn, don’t let inaccurate records drag you down. Just like trees shed their leaves, your staffing agency should also do away with manual processes. Fall into compliance and have an easier year-end audit with better time-tracking software. Book your demo today.