Management of PTO
The subject of managing vacation time (or other PTO) is typically one that few think about until they look at the balance sheet at the end of the year and realize the tremendous liability on the books. All to often policies are designed in such a way that no one routinely reviews what can be a significant issue. Many companies manage their PTO on an informal basis or do so in a highly decentralized manner. The result is that there is little control and, in many instances, much of the time recorded is in accurate.
This article reminded me of the times when I might go into an organization to do due diligence for an acquisition or to review HR practices in general. Many times the organization cannot account for PTO. Alternatively, they will provide a detailed report showing what they believe to be an accurate accounting, but fail to realize that the process of tracking the time is full of potential problems. According to the article, not having adequate checks and balances can cost firms between 3 and 15 percent of their total operating costs. That's certainly something to think about and it's amazing how many companies aren't.