Discover the benefits of a payroll system and how to improve your internal HR processes with an automated one.
We live in a fast-paced world where every part of the business is expected to churn out data in the fastest and most accurate way possible. This has become a challenge for human resources as managing employees means endless pay calculations, leave management, and scheduling. This is where payroll systems become useful.
With payroll systems, you unload the repetitive and error-prone parts of your HR job so you can focus on steering people toward success. In other words, payroll software frees up time so you have the mental space to manage employee performance or improve their engagement and productivity.
The HR department’s basic responsibilities:
- Employee Recruitment
- Employee Induction/Onboarding
- Employee Training
- Employee Wellness & Personal Development
- Employee Payroll Management System
- Employee Benefits
HR tasks could be tiring and difficult even for a skilled professional. It does not help when employees are unhappy, especially when it is often related to money.
Payroll management, for instance, could give anyone a headache, which is never good for business. This is especially common for HR departments that still manage payroll traditionally. In fact, small businesses still spend more or less 41 hours on tax and payroll matters every year.
In other words, manual payroll takes time and usually results in papers piling up.
Why shift to an automated payroll system
Many have also turned to technology for solutions to solve these HR problems in modern times. Cloud-based software systems are more accessible for HR managers and staff alike, making work easier and faster for many.
But what exactly are the benefits of an automated payroll system? More importantly, how do you choose the best HR payroll software solution?
The benefits of automated payroll software
A well-organized payroll system offers several benefits that contribute to employee satisfaction and enhanced workplace efficiency. Here’s why companies should consider implementing a payroll system:
- Boosting employee morale: A payroll system helps maintain employee morale by ensuring timely and accurate compensation. Workers are more motivated to perform their best when they feel appreciated and fairly compensated.
- Retaining valuable employees: A reliable payroll system helps retain valuable assets, such as employees. Avoiding payment delays and discrepancies reduces the risk of losing talented individuals to competitors.
- Enhanced efficiency: Automation and streamlined processes within a payroll system improve efficiency. This minimizes errors and saves time for HR professionals, allowing them to focus on other essential employee-related tasks.
- Legal compliance: A well-structured payroll system ensures compliance with labor laws and regulations, reducing the risk of legal issues that could harm the company’s reputation.
- Improved productivity: Employees work more efficiently when their compensation is managed accurately, leading to higher productivity levels and better overall performance.
In summary, implementing a robust payroll system not only contributes to employee satisfaction but also helps businesses operate smoothly and maintain a positive reputation in the long run.
Related: What should you look for in an HR software?
When to opt for payroll systems
HR work is difficult, especially with an antiquated payroll management system. It may be time to get an automated payroll system that works for you when it has become overwhelming.
Technological advancements have made cloud-based HR possible, resulting in smoother, simpler operations and a better return on investment (ROI).
Related: Why choose payroll software with a time clock
What are the specific objectives of a payroll system?
- Easier accessibility
- Automated worktime recording
- Quicker calculation of payroll
- Quicker calculation of
- Base Salary
- Salary deductions
- Leaves
- Benefits
- Perks and Bonuses
- Expenses
- Holiday Pay
- Overtime Pay
- Accurate payslips
- Automated tasks
- Proper and complete employee forms (e.g., P45, P60)
- Fewer compliance issues
- Fewer worries about tax filing and management: forms, legislation
- Secured data storage (e.g., payslips, reports)
- Accurate reports to HM Revenue & Customs (HMRC)
- Excellent basis for planning costs and budgets
- Employee self-service
Pros of payroll automation
- Faster calculations
- Easier pay slip generation
- Efficient time recording and data storage
- More accurate reporting
- Optimized planning costs and budget
Cons of payroll automation
- System limitations may still require human intervention
- Security threats
- Sensitive information access
How does an automated payroll system benefit a business?
Faster payroll calculations
An automated payroll system offers numerous benefits to businesses, including faster payroll calculations. Unlike manual calculations, which can be time-consuming and error-prone, automated payroll software streamlines the entire process.
An automated payroll system saves valuable time and reduces the risk of errors by eliminating the need to gather data from various sources and perform complex computations manually. The software ensures meticulous data comparisons and analyses, ensuring accurate and reliable results.
Moreover, automated payroll systems offer customization options, allowing businesses to tailor payroll periods according to their needs. Whether it’s weekly, monthly, quarterly, or any other pay schedule, the software efficiently handles payroll processing, accommodating diverse payment intervals.
Easier payslip generation
An automated payroll system significantly benefits businesses, especially in payslip generation. Unlike manual processes that consume valuable time and may lead to errors, payroll system software streamlines this crucial task, ensuring accuracy and efficiency.
With manual payslip generation, even minor changes in details can become time-consuming and error-prone. However, an automated payroll system simplifies the process by automatically incorporating changes and calculating precise values. The system ensures that each payslip is detailed and error-free.
Additionally, the software can handle various tasks, such as creating, printing, or emailing payslips, further reducing the burden on HR personnel. By automating payslip generation, businesses can save time and energy, allowing HR teams to focus on more strategic and value-added activities.
More efficient work time recording and data storage
An automated payroll system offers businesses significant advantages, particularly in worktime recording and data storage. By seamlessly integrating with timesheets and attendance records, the payroll system can expedite and streamline the payroll calculation process.
The system automatically records employee login and logout times, tracks working hours, and monitors break frequency, ensuring precise and efficient payroll calculations. This is especially beneficial for businesses with large or expanding workforces.
Moreover, the automated payroll system efficiently stores essential employee data for easy reference. The software meticulously manages these crucial details, from paid leave considerations and remaining leave balances to overtime compensation and entitled bonuses, reducing the likelihood of human error.
Those are just some of the employee data the payroll software stores. As enumerated earlier, there are additional bits of information, too, that it keeps for easy reference. For instance:
- Should an employee’s leave of absence be considered paid leave?
- Has the individual already used up all the leaves she is allowed to use?
- Has she done overtime work for which she should be compensated?
- Is she entitled to a particular bonus?
More accurate reporting
An automated payroll system offers businesses the advantage of more accurate and comprehensive reporting, particularly for year-end reports. Leveraging employee attendance data, the system can generate detailed reports that encompass various aspects of the company, including departments and individual employees.
With built-in reporting capabilities, payroll software provides templates and customization options, facilitating the organization of diverse information. This customization empowers businesses to tailor reports to their specific needs, ensuring the inclusion of relevant data.
Furthermore, an automated payroll system that supports online filing, such as RTI submissions, tax filing, expenses, benefits, and forms, streamlines the entire payroll process. This integration reduces manual paperwork and simplifies regulatory compliance, saving time and effort for the HR team.
Optimized planning costs and budgets
An automated payroll system allows businesses to optimize cost planning and budget allocation. By efficiently gathering and analyzing data, payroll software enables the creation of new and effective payroll models, aiding in better financial planning.
The accuracy of payroll history and reports, derived from precise data, empowers businesses to predict and address potential problems proactively. With these insights, proactive solutions can be formulated to mitigate future financial issues, particularly concerning tax matters, which can be complex and challenging.
Accurate information, both internal and external, is easily accessible and streamlines business operations, resulting in smoother and hassle-free management. Embrace the benefits of an automated payroll system and unlock the potential for enhanced financial planning, efficient budget allocation, and proactive problem-solving, ensuring a robust and financially secure future for your business.
Are there drawbacks to automated payroll software?
Nothing is a hundred percent foolproof, though. Having a perfect payroll and timekeeping software may sound too good to be true. It probably is.
While it helps HR do its job more properly, payroll software may also have its issues or weak points.
There are things that an IT system may not be able to do. For instance, it is important to emphasize it may do detailed automated calculations but not administrative work. That’s the part that specifically requires the human touch.
It can’t automatically enter employee details by itself (e.g. personal, hours worked, overtime hours, and other salary deductions). Those must first come from an external force. That’s you, the HR department. It also cannot change pay rates and tax codes, among other things.
These are things that are still best handled by real people.
That is why it is important to find the right system for the business to get the best results. It must be able to do hard work accurately and on time, yet allow human intervention whenever and wherever necessary.
Related: Philippine industries where payroll automation can make a great impact
The disadvantages of automated payroll software
Humans are not perfect, so we can’t expect anything man-made to be perfect all the time. Therefore, as stated, it’s possible that issues with the IT system may arise.
Automated payroll problems include the following:
- Security Breaches (loss, theft)
- Data security
- Cybersecurity
- Access to sensitive information that:
- can affect quality
- be used for control
- be misused, especially for fraud
They are not just little things that you can ignore or not be bothered about. They need to be avoided no matter what!
The matter of sensitive payroll data
Remember that you hold sensitive data that belongs to your employees. They trust you with their private information (addresses. SSN, etc.). In return, you must keep those data safe.
It’s not simply out of mutual understanding. It is the law. You are liable should you fail to protect any bits of information given to you from leaking and reaching the wrong people. You need to ensure payroll software security.
Choosing your HR payroll software
It doesn’t matter if yours is a big company or a small business. What matters is how things are managed.
How to choose an HR software solution
Determine first what the business requires and start from there. The software enables you to customize your payroll model according to HR and employees’ needs.
Foremost of these needs are speed and efficiency, which are quite expected. You don’t want delays. You also don’t want mistakes in the details because they cause more delays and more possible problems. Your payroll software must minimize errors as much as possible.
Most importantly, the system must be secure! There is no excuse to settle for less. Everyone has a right to privacy when it comes to personal information. Confidential details must remain safe from prying eyes. Employees must feel that they can trust you with their private details.
Needless to say, computerized payroll software can greatly benefit your company. However, be prepared for the costs. Automated payroll systems with better or full features naturally cost higher due to the safety and convenience they can provide.
As long as the cost is reasonable, such an investment would be beneficial in the long run.
There could be additional expenses to consider as well. For instance, there might be a need to invest in (computer) equipment and skilled operators. If you have enough resources, this should not be a hindrance to improvement.
Start using payroll software.
As HR, you are responsible for the welfare of your employees in the company. That makes you valuable to the company, too. Therefore, payroll software that makes your job easier, less stressful, more accurate, and more organized is what you and your company need.
Major advantages of payroll software:
- Speedy payroll process: It normally means no delay. Manual payroll is the usual cause of delay.
- Efficient payroll management: This is achievable with hassle-free payroll system software.
- Accurate information: Accurate reporting is very important, as numbers can be quite tricky. This prevents mistakes in calculations as the software automatically does them.
- Fewer Payroll Tasks
- Basis for analyses: Analyses are vital in improving management, planning costs, and allocating budgets.
- Safe: Private data are generally kept secure.
Related: Should you go with a customer of SaaS payroll?
Choose the eezi way of doing payroll.
Stop the tedious manual payroll process! Choose the right software and reap the benefits of payroll system done right for your business. See the list of features here.
