Many companies are expanding and stepping into new markets. With global expansion comes the responsibility to manage and pay a wider workforce. In a recent report, it was concluded that organizations use somewhere between 1-100 distinct payroll systems within one single MNC to pay salaries to their employees and manage payroll processing. However, they face a hard time dealing with the complexities involved in payroll compliance.
For every country that your business is located in, there is a different set of compliance challenges to address. Staying compliant throughout the payroll process and ensuring accuracy can be time-consuming, costly, and daunting. International compliance means a great deal of manual effort and the possibility of errors with serious consequences. Hence, comes online payroll services that automate the process and make life easier.
Payroll automation completes payroll processing through a computerized system, bringing the most drastic changes in the payroll industry. It streamlines the process by eliminating manual methods that require human intervention and is considerably slower than the automated system.
The payroll technology saves time and costs while providing greater accuracy and improved data protection. It helps employers and HR professionals manage and process employees’ salaries, leaves, time-offs, sick days, overtime, and taxes along with the actual delivery of payslips in a timely manner. There is no denying that payroll automation makes processing accurate, simpler, and faster that is not the case with manual methods.
We will discuss the benefits of an automated payroll system in detail but first, let’s understand what it means. Have a look:
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Payroll Automation: What Does It Mean?
Payroll automation or automated payroll is an innovative and modern way to simplify the process of paying accurate salaries to employees on time. Employees, employers, and HR teams prefer automated payroll software as it saves time and effort on strenuous processes, which include reporting, federal, state, and local tax filing, calculating withholdings, direct deposits, etc.
We know that payroll managers already struggle with hectic schedules and hardly have any time to spend on crunching numbers manually and maintaining several spreadsheets. Moreover, HR managers already have a plethora of responsibilities, such as employee relations, recruiting, hiring, benefits administration, training and development, and more. They also have to take care of other tasks, including:
New Hire Tasks :
Pay schedules
Demographic information
Withholdings
Bank details
Benefit deductions
Weekly Tasks :
Calculate Hours
Submit payrolls
Adjust hours according to holidays and PTOs
Provide checks and pay stubs
Adjust for garnishments and overtime
Mid-cycle payroll corrections
Periodic Tasks :
Payroll reports
Workers’ compensation
Tax filing
Open enrollment
Employee tax form filing and distribution
Doing all these tasks manually would take hours and you might have to compromise on other core duties to complete payroll processing in an accurate and timely manner. However, automated payroll performs all these functions for you while you focus on other critical tasks. Rest assured that automated payroll software is the need of the hour and the following benefits will surely justify your investment to implement the modern system.
A closer look at the benefits of Payroll Automation
Ensures Global Compliance
Companies have to stay compliant with ever-changing laws and regulations because any mistake or ignorance can lead to hefty penalties and fines. Moreover, it can harm a company’s reputation and brand image. If your business is set up in different countries, then it becomes even trickier as you have to take care of laws and compliance in every country your company is operating in. With automated payroll systems, you can avoid all these serious consequences by meeting deadlines, keeping up with the laws, filing taxes accurately, and meeting tax requirements. Thus, avoiding fines and legal repercussions that can damage a company’s brand value.
You mitigate potential risks and allow your HR department and administrative managers sufficient time to focus on global expansion and core tasks. You are assured that your company complies with federal, state, and local regulations while managing all the internal policies and rules at the same time, including pay periods, overtime, and holidays. By implementing the software, you can make it easier for your company to expand on a global level.
Quick and Accurate Calculations
In manual payroll processing, you have to create multiple spreadsheets to calculate several payments, then write each entry by hand. For a small number of employees as well, you have to display a complete commitment for each period and even then there are chances of errors. Even after being meticulous, you cannot guarantee accuracy. This is where payroll automation comes in that uses an electronic method to compute wages and other types of payments, such as hourly wages, basic salary, double-time, overtime, retroactive pay, bonuses, commissions, raises, etc. This integrated software estimates gross to net earnings according to the data that the payroll representative inputs.
It eliminates the need for manual paycheck writing and generates paychecks, stubs, and enables direct deposits. If a terminated employee’s pay is processed but the payroll manager ignores it, then the system will notify the same and will not process the payment. However, you have to make sure that the entries are correct as the system calculations are entirely based on the data inputs.
Simple Tax Filing
Calculating and filing taxes is complicated and lengthy. You cannot expect a human to be precise and correct while filing taxes and staying true to the deadline. That is not the case with payroll automation as it not only assists you to calculate the amount accurately but also helps in tax filing. If your business is operating in more than one country, then you must be aware that there thousands of tax jurisdictions in the US, and tax rules are changing constantly. Therefore, the software keeps you updated with changes in laws and regulations. You can keep track of all the rules which otherwise consumes a lot of time and costs in case you get anything wrong.
By tracking all the changes and recent updates in different policies, it enables you to meet the deadlines. Also, it calculates withholding tax for each employee, thereby providing you enough confidence that your taxes are filed correctly and on time.
Improved Efficiency
Employers and payroll managers need to be efficient across all areas and there is no better way to achieve this than payroll software. It reduces the time and resources required to process taxes, salaries, employee information, and other details. Integrated with other systems, such as HR, accounting, and attendance tracking, automated payroll software is used to monitor for time-keeping performance reporting, remuneration, development, and more. You have accurate and instant details regarding salaries and performance available at your fingertips. Hence, there is no need to search for information manually from hundreds of paper-based systems. There is also an added benefit of faster time and expense reporting as you have access to real-time information about the global workforce, including leaves, absence, time-offs, expenditures, and labor allocations.
A survey found that almost 50% of workers would leave their job and start looking for a new position after experiencing just two issues with their payroll processing and paycheck. So, rather than messing things up through manual methods, payroll software ensures error-free filing and calculations. From commissions to overtime to PTO, it avoids all the chances of mistakes in every aspect that affect employee’s pay. As there is no manual data entry, you don’t face the risks of mistyping and copying over incorrect data.
Automatic Deductions
Last but not least. Deductions are an important part of payroll processing and payroll software makes it automatic. From the mandatory state, federal, and local laws to Social Security and Medicare tax withholdings, it takes care of all the time-consuming processes within no time. It also addresses the challenge of changing tax rules and regulations.
An automated payroll system has tax rates coded in the software, thereby calculating the withholding tax for every employee based on data input. It reduces the chances of errors and fines from government authorities and the state taxation agency.
Conclusion
Thanks to automated payroll software, companies have enough free time and resources to focus on long-term and core business goals. Also, it supports global expansion by removing payroll distractions. With so many benefits to reap, it is no surprise that companies are opting for payroll automation. So, it’s time for you too to implement the software now and witness wonders for your business.
Author’s Bio: Scarlett works with the editorial team of Accomplish EP, a leading company offering benefits administration software. Exploring the latest technologies, reading about them, and writing her views have always been her passion. She seeks new opportunities to express her opinions, explore technological advancements, and document the details. You can always find her enjoying books or articles about varied topics or jotting down her ideas in a notebook.