How to Track PTO Accruals (Manual vs Automated)

Most companies have an accrual-based PTO system, where employees earn paid time off relative to the amount of time they work.

It makes sense to do this – it means employees are fairly compensated for the time and work they put in, and avoids tricky edge cases where you need to prorate an employee’s PTO if they start or leave part way through the year.

But PTO accruals themselves can be complicated and time-consuming to keep track of. To prevent your HR team from spending hundreds of hours just keeping your PTO balances up to date, you need an efficient system to manage all this.

There are a few options to consider for tracking PTO accruals. You could do it manually (which is cost-effective, until you consider the labor cost). You could use a PTO tracking app, or you could manage accruals using a full-stack HR software suite.

Keep reading and we’ll run through the pros and cons of each option, and help you decide the best way to track PTO accruals in your business.

Contents

Option One: Track Manually

The first option to consider is manually tracking PTO accruals.

To do this, you’ll track each of your team members’ PTO balance in a spreadsheet. For each accrual period (e.g. each month, week, etc) you calculate how much PTO each person accrues, and add it to their PTO balance.

Whenever someone takes part of their PTO, you subtract the PTO taken from their PTO balance.

Pros:

Doesn’t require you to sign up for any new tools or software (other than a spreadsheet tool, which you’re probably already familiar with).
Cost-effective for small teams.
Flexible, easy to customize.

Cons:

Time and labor cost will get out of hand for larger teams.
High chance of human error (particularly as team size grows).
More advanced tasks (e.g. creating custom reports, integrating with other tools) may be difficult.

Recommended Tools: Google Sheets/Excel, PTO Accrual Calculator, email/messaging apps (e.g. Slack, MS Teams, Discord, WhatsApp)

Free resource: how to set up a PTO tracker in Google Sheets (plus a free template)

Summary:

Manually tracking accruals can work for small teams – e.g. those with just a few people. It’s easy enough to jot down numbers in a spreadsheet, and our free accrual calculators save you some complicated math.

As your team grows, though, tracking everything manually will become quite time-intensive, and you’ll want to look for an automated solution.

Option Two: PTO Tracking Apps

The second option is to use a dedicated app for tracking leave.

The app handles all accruals and updating of your team members’ PTO balances. You just set up a few things, such as the accrual rate, and the app automates each accrual at the specified period.

Employees request PTO through the app, and the app keeps track of when their leave is, and automatically deducts and PTO taken from their balance.

Pros:

Saves time manually entering PTO and calculating balances.
Lower chance of error.
Generally simple and straightforward to start using.
Potentially integrates with other parts of your workflow.
Comes with other useful features, such as reporting, automating PTO requests and approvals.

Cons:

Typically requires a subscription cost to use.
May not fully integrate with all your HR workflow.

Recommended Tools: Flamingo

Summary:

For most teams – especially small to medium-size businesses – a PTO tracking app is a much more effective way to manage PTO accruals.

The app does all the calculations for you, automatically keeping PTO balances updated (including deducting the right amount when people redeem their PTO).

An app comes with an added cost, but you’ll generally find that the cost comes out less than the value of the time you would otherwise spend calculating PTO accruals and keeping everything updated by yourself.

For automated PTO tracking, we recommend using our app, Flamingo. Flamingo is free to try, and even has a free plan for small teams. It’s a simple, cost-effective and time-saving upgrade over manually tracking leave in a spreadsheet.

Option Three: Full-Stack HR Software

The final option to consider is a full-stack HR suite (aka an HRIS – Human Resources Information System).

This kind of tool manages your entire HR system, including (but not limited to) PTO accruals.

Along with leave management, you’ll have modules for things like payroll, onboarding, performance management, and more.

Pros:

Automates PTO accruals (as well as other HR tasks).
Ensures your PTO system is integrated with the rest of your HR system (such as employee records, payroll).

Cons:

A lot more expensive than a PTO app.
More complex setup and onboarding required.
Team members might find it more difficult to navigate.

Recommended Tools: BambooHR, Workday, Paycom (and many more)

Summary:

For larger teams, who need an app to manage other areas of their HR workflow, a full–stack HR software might be the best option.

This lets you keep track of PTO accruals in the same system you use for payroll, compliance, benefits administration, and other HR tasks.

It comes with a higher cost, though, in terms of both time and money. Small to medium teams might find a tool like this to be overkill.

What’s the Best Way to Track PTO Accruals?

Different businesses can find success with different ways of tracking PTO accruals.

In general, we’d say the following:

Full-stack HR tools are a good fit for large organizations (i.e. enterprises).
PTO tracking apps like Flamingo are the best choice for small to medium-sized businesses.
For very small teams (e.g. bootstrapped startups in their early stages), you might just want to use a simple spreadsheet to track everything – but a tool like Flamingo with a free plan for small teams can work just as well, without any added expense.

For most teams, automated is going to be better than manual. If you’re manually tracking accruals, it’s not only taking up a lot of time and headspace, but you’re inevitably going to make a mistake, which will cause disruptions and more time to be lost.

If you’re concerned about the cost, consider the value of the time you spend calculating accruals. It’s probably costing you more than it would to pay $20-$30 for a tool that automates this work for you.

Final Thoughts

An accrual-based PTO system is the standard way most businesses operate (read about the differences between accruals vs lump-sum PTO here).

But with accruals comes a lot of work, especially if you’re manually updating PTO balances for 10+ employees each month (as well as logging leave requests, and updating employees’ balances when they take time off).

You can save a lot of time, energy and headspace by automating administrative tasks like tracking and calculating accruals.

If you’re going to do it manually, use our free PTO accrual calculator to at least do away with a lot of the complicated math.