More than the investment, materials, and other resources, employees are the boon for business. Human resource management is vital in any organization to manage employees, and the most important segment of HR process in an organization is Payroll processing. The Payroll process is an influencing factor in gaining satisfied and motivated employees in an organization.
Only a satisfied employee will be able to convert prospects into satisfied customers and win business for the organization. Processing and controlling payroll operation serve as the center of employee – employer relationship. Payroll process affects every aspect of business from employee morale to the company’s financial stability.
The payroll processing should be handled with care, as any mistakes made during this process can have a huge impact on your business. The mistakes can result in huge fines, dents in cash flow, revenue issues, lawsuit filing, and finally employees might even leave the company. Employee satisfaction and employee retention can be viewed as two sides of the same coin. Since, employee training’s are expensive, employee retention is the best way to cut down the budget of maintaining a stable work environment.
With increasing business opportunities and multinational culture of business, the payroll process has become intricate and complex to handle. Some of the common payroll challenges include keeping up to date in a constantly changing world, dealing with real time information, software limitations, getting accurate reports, and ensuring employee confidentiality.
This brings in the necessity for the implementation of an efficient payroll system. As the business expands the implementation of a payroll system becomes important.
Payroll systems are comprehensive and flexible solutions that assist in consolidation, integration and simplification of the complex business processes. As more employees are in the company, more paperwork is involved; a payroll module implemented assists in sorting out the financial documents appropriately.
A payroll system automates the overall payroll process from capturing of shift cycle and calculating efficient attendance reports to managing the talents of resources. The payroll module assists in gaining detailed insight of the personnel cost, thus turning the process of future strategic planning easier. Payroll software categorizes employees according to their department and makes the payroll process simpler by managing numerous tasks and operations with ease.
The functions of the payroll module include specification of benefits and reimbursements, tracking employee work timings, generation of shift schedules, and calculation of salary, arrears, bonus, gratuity and termination settlement. The advanced payroll module comes with additional features such as customization of pay units and application of deductions.
Benefits of implementing a payroll system:
- Easy calculation: The troubles in calculating payroll for employees can be made stress-free by automating the payroll process using a payroll system.
- Reduction in processing time: Payroll systems are effective in saving the processing time and thus the money.
- Secure data transactions: Payroll systems come with added features to save employee details securely. This controls employee’s access to certain critical information available within the ability to track employee entries.
- Availability of easy-to-read reports: Reports on various aspects of payroll processing such as departments wise expense, company investment and gain can be obtained easily with a payroll system. These reports can be utilized later for decision making purposes.
- Forecasting: Payroll systems help in forecasting and planning the future needs of the company. The reports obtained assist you to graph the payroll expenses and financial data instantly. This helps in gaining an overall view of business and thus planning the future becomes easy.
- Gaining detailed insight of the personnel cost: Payroll systems assist in gaining detailed insight of the individual cost being paid to the employees and the company’s overall human expenses. This insight obtained help organizations to make right decisions when it comes to human capital management.
- Error free payroll process: Payroll systems help process the employee pay accurately, by ensuring an easy and orderly flow in the process.
- Reliable backup: When the payroll process is managed manually, it is really tough to maintain all the documents and reports. Using a payroll system, you can store these reports and data in various online databases available. This will stand as a reliable backup in case of damage to the data available in hand. Payroll software can change the overall accounting process of the organization and can assist in precise payroll processing. An effective payroll system will thus assist in business growth, avoiding the common financial mistakes in the organization, by making the computation of tax obligations and salaries easier.