The essentials in 30 seconds

The truth is there is no single answer. Paper still works for micro-businesses with 2 or 3 employees. Excel can serve up to 10. Above 10 employees, almost any automated system pays for itself in time savings.

The question before the answer

Don't start with 'what is the best system'. Start with 'what problem am I trying to solve':

• Legal compliance: any system works, including paper if well maintained. Learn exactly what the law requires.
• Administrative efficiency: only resolved with serious digitalisation.
• Real-time visibility: only resolved with an automated system.

The case for paper

When it makes sense: a business with 2 to 5 employees, all in the same space, simple fixed schedule, zero budget.

How to do paper well:

• One sheet per employee, one page per month
• Daily signature plus monthly signature from the manager
• Recording of meal breaks
• Monthly digital backup (photos or scans)
• Retention for 5 years in dry storage

Where it starts to fail: the 6th employee. From that point on, manual consolidation consumes disproportionate time.

Legal note: paper is technically valid but especially vulnerable during inspections — it can be questioned as tampered with or incomplete.

The case for Excel

When it makes sense: 5 to 10 employees, with someone responsible for HR or administration.

The right version:

• Single file, shared on Google Drive or OneDrive
• Automatic formulas for calculating hours
• Edit history enabled — required for reliability
• Access restricted to the HR manager

The two structural problems with Excel: anyone can edit January records in September. For 30 employees it is painful, for 50 it is unworkable.

The case for an automated system

Signs it is time to switch:

• You have already lost hours chasing errors in Excel
• You have had disputes about hours that do not add up
• Your accountant complains about data quality
• You felt stressed just thinking about the next ACT inspection

To understand the available technologies, read what RFID is and why it works in factories. To see how different systems compare, see the comparison of Factorial HR alternatives.

Comparison table

The honest verdict

Fewer than 5 employees and zero budget: paper can work. Between 5 and 10 employees: well-structured Excel is reasonable. More than 10 employees: an automated system pays for itself in 2 to 3 months of saved time.

If you have decided to migrate, read how to make the transition without complications.