Manually marking attendance is very complicated and time consuming process. Even if one is using application for managing attendance, he/she needs to go through data entry of many persons attendance which is again a time consuming process. In this paper we have proposed an algorithm formaking attendance entry automatically using Template Matching and Image Processing Technique. The algorithm works in two parts, first it will generate attendance sheet by taking input from user. The pattern of attendance sheet and template is predefined using which the system will generate an image of an attendance sheet. After getting a filled attendance sheet one need to scan it. Second part will store image of attendance sheet into jpeg format and then using the concept of histogram it will match the image with predefined template for marking attendance.