Why You Should NOT Track PTO in Excel

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If you’re good with spreadsheets and love saving money whenever you can, the idea of tracking PTO in Excel is probably appealing. Especially if you’re a small or new company with few employees. You get to skip the payroll service, save money, and track things manually. 

How hard could it be? 

Disastrously hard, it turns out. Sure, Excel was a cutting-edge resource when it came out in the 1980s. But there’s a lot more software to pick from now—including HR-specific software that expertly tracks PTO for you.

Here’s why we don’t recommend tracking PTO in Excel. 

The Pitfalls of Using Excel for Tracking PTO

There are many things that can go wrong when you try to track PTO using Excel. At a minimum, it’s a waste of your valuable time. At its worst, an Excel mistake can result in a lawsuit when an employee realizes that you’ve screwed up their benefits. 

Let’s take a closer look at why I don’t recommend using Excel for PTO tracking.

Too Much Room for Human Error 

The unfortunate thing about being human is that humans make mistakes. A ton of them, in fact. Humans are estimated to make at least 3 errors per hour when we’re awake. If we’re sleep deprived, hungry, or feeling down, that number can skyrocket. 

Unlike humans, the software systems we’ve built don’t get sleepy, hungry, or depressed. They make far fewer errors than we do

That’s why the worst thing about manually tracking PTO in Excel is that it creates ample space for human error. Sooner or later there will be a disagreement on your records if you try to manually track PTO in Excel. And because unused PTO counts as wages and compensation in a growing number of states, this could set you up for disaster. 

Mistakes in your PTO tracking could also drive someone to claim that PTO was applied unfairly. This could be the basis for a discrimination claim. 

Of course, even the best payroll software can make mistakes. Make sure you audit your payroll software at least once a year to make sure it’s working the way it should. 

It Takes Too Much Time

It takes much more work to set up and maintain a meticulously color-coded Excel spreadsheet than it does to just spring for payroll software. Even the most basic lump sum and accrual PTO systems require endless calculations. 

You might feel fine doing these yourself if you have one or two employees, but trust me. Once you start to grow, you’ll find yourself wanting to hire a fleet of HR professionals to manage your Excel spreadsheet. 

But all you really need is payroll and HR software that integrate with each other. Even better if all your software services integrate seamlessly. 

Take Gusto, for example. This full-service payroll software integrates with HR and ATS services like Breezy HR, POS systems like Clover, and workflow management software like Asana. When all your software plays well together, it saves you a lot of blood, sweat, and tears. 

Software is good at automating tasks that take up a lot of time, like PTO tracking. When you don’t have to worry about doing constant calculations and calendar edits, you can spend more time doing the work that matters. The work that only your creative human mind can do. 

And when you get big enough to hire an HR team, they can spend their time managing that system—not crunching numbers in Excel. 

Excel Lacks…A Lot

Yes, I know, Excel is a software system. It’s not the same as using pen and paper to track PTO. (Please don’t do that.) 

But when you use Excel, you’re missing out on so much. You have to create different spreadsheets or tables for each employee. You have to assign different data points to relevant columns and color-code them in an attempt to not get confused. You must make sure that everyone’s data is accurate, all the time, and make constant changes as people take time off and then accrue more time off. 

And you can forget about processing PTO requests via Excel. It’s not a thing. 

Okay, it probably is a thing for some people, but Excel won’t seamlessly deliver those PTO requests to your calendar once they’re approved. It won’t send automated notifications to the employees requesting time off. 

It won’t do a lot of things. So pry your fingers away from your beloved spreadsheet. You can use it for other things—just not keeping track of PTO. 

What’s the Best Alternative to PTO in Excel? 

Getting real payroll/HR software, of course! Any payroll software worth its salt nowadays comes with PTO tracking built in. You’ll be shocked at how easy PTO management becomes once you start using dedicated software. 

With a good payroll service, you’ll be able to set up the software according to your company’s PTO policy. You can even set up multiple policies for different departments or individuals within your organization.

Let’s say you’re a large health and wellness organization. Some of your employees teach classes to educate people about preventative lifestyle practices like eating a nutritious diet and exercising every day.  These employees have Bachelor’s and Master’s degrees in things like nutrition and health education. 

Other employees are medical professionals. Think doctors, nurses, and surgeons with advanced degrees and entirely different responsibilities than your health education department. 

Since these two entities within your organization are so different, you want to create two different PTO policies for each group. With payroll software, you can do exactly that. 

It takes a little bit of time to get everything set up on a software system. But once you’re done with the initial setup, PTO tracking is a smooth ride. It takes the stress and error of manual tracking away and replaces that with things like: 

  • Employee accounts that allow each employee to view their PTO balance, calculate future time off, and request PTO 
  • Automated PTO calendars that track who’s out of the office and when
  • Reports that help you track trends, like whether your team is actually using their PTO hours
  • PTO approval workflows that ensure that all the relevant team members can review and approve (or deny) PTO
  • Integrations that seamlessly bring your HR suite together
  • Tools that help you stay on top of federal, state, and local tax compliance 
  • Benefits management
  • Live payroll support 

Tracking PTO in Excel just can’t compare to using sophisticated, time-saving payroll software. Think of it this way: Excel is a receptacle for numbers and data. It’s like a storage container. It just sits there, collecting data, while you move things around from one storage cell to another. 

Sure, it can do some simple calculations, but you have to initiate them. 

Payroll software, on the other hand, grabs your items from you and stores them just the way you want. Each time you take an item out, the software recalibrates your whole system to make sure everything stays organized. 

And you don’t have to spend your day staring at hundreds of little rectangles. That’s a win in our book. 

How Much Does Payroll Software Cost? 

Most payroll software companies charge a base monthly fee plus a smaller monthly fee for each employee who will use the software. The base monthly fee is typically between $25 and $50. The employee fee ranges from $2 to $8 per employee. Many companies offer discounted rates as the number of employees gets higher.

If you only have a few employees, you might find payroll software with a flat monthly fee. Just make sure that the software you choose can scale with you as you grow. 

For me, payroll software saves so much time and effort that it’s worth its weight in gold. I’d pay for it even if I only had one or two employees. It’s just not worth it to spend time sweating over an Excel sheet when I can have payroll software do the heavy lifting for me. 

Choosing the Best Payroll Software

Does the idea of combing through dozens of payroll and HR software options seem daunting to you? We totally get it. That’s why we’ve narrowed the playing field for you. See our guide to the best payroll services to find out which payroll software services we recommend. 
If you need full-spectrum HR software that includes payroll and PTO, check out our list of the best HR software services.

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