Why is payroll software useful? To answer this question, you have to ask yourself what do you hate about running payroll most? These problems can come in the form of late and inaccurate employee payments, lack of reporting capabilities and even disputes between employer and employees over inaccurate payrolls. Good thing payroll software can help prevent such complications. These tools have a wide range of capabilities that could improve payroll management, among them:
It is a known fact that payroll processes can be tiresome and quite complicated at times when done manually. This is especially true for small businesses, many of whom still cling to manual payroll processing. Manual computation brings with it the need to spend time and effort to be able to keep track of staff information and files and calculate salaries, taxes, bonuses and deductions, to name but a few. If you are a small business owner, you might want to check out this top 20 payroll software guide. It will give you an idea on the most popular payroll tools around.
Managing payroll is indeed among the most critical processes in a business. But given the fact that it does not directly generate income makes it imperative that it be kept short and cost-efficient. Payroll software tools are meant to automate this task, allowing businesses to focus on revenue-relevant and core processes. These tools are indeed among the many ways by which to cut labor costs. Proof of this is the fact that payroll automation decreases costs by as much as 80% as reported by the American Payroll Association.
You may have been meaning to ask one of the most common inquiries about payroll tools–why is payroll software useful? Problems associated with the process such as payroll errors, tax compliance, employee-employer disputes and security concerns plague payroll managers. There are a myriad benefits that come with these tools that if utilized correctly can guarantee freedom from these problems and therefore, better payroll management.
When you’re done reading this article, you will have learned the usefulness and benefits of payroll software along with a full understanding of other aspects of such platforms. Hopefully, you can use this new knowledge in choosing the best tool for your organization.
Why is payroll software useful? Payroll solutions offer organizations the gift of automation, templates, data centralization and customization, among others. These features come with benefits that are critical to payroll management. Here we present problems that payroll staff have to contend with and what payroll software can do about them.
Problem: Manual payroll processing takes up too much time and is prone to inaccuracies. Any minor error can negatively impact not only a company’s finances but could also lead to legal repercussions. The US government has passed the Sarbanes-Oxley Act of 2002, penalizing companies who engage in financial malpractice.
Solution: As payroll software automate virtually all your processes, it can help your organization rid itself of erroneous financial statements, thereby helping you avoid penalties. Employee information and government regulations are consolidated with calculations automated, making sure that nothing is overlooked during payroll runs.
Problem: Mistakes committed during payroll processing often lead to inaccurate payment of employee salaries. Such can result in employee discontent and even negatively impact their morale. Despite the fact that most of these mistakes are honest in nature, they can still adversely affect your organization’s reputation.
Solution: Good thing payroll tools provide businesses with accurate and consistent computations, making sure that salaries are paid in full every time. Key information such as salary grade, expenses, deductions and benefits are automatically factored in during payroll runs, ensuring error-free wages.
Problem: Tax compliance poses a real problem for companies whose staff and contractors are distributed across the United States or abroad. Tax jurisdictions in the US alone run in the thousands with taxes coming in a variety of forms, making compliance with tax rules a pretty much taxing job for payroll staff.
Solution: Both owed and paid taxes can easily be calculated using payroll software. Reports submission to regulators are accelerated, ensuring that all requirements are accomplished on time. Companies are also able to immediately comply with changes in tax laws as most vendors update their systems regularly, making sure that penalties from such are avoided.
Problem: Payroll is known as a common source of dispute between employee and employer. Inaccurate paychecks and staff data can result in such conflicts.
Solution: Using payroll software, businesses can be more transparent with its finance, especially when it comes to employees. Access to information such as benefits, time sheets, and other data results in fast dispute resolution.
Problem: Manual records keeping can be tedious for payroll staff. Using different files to store employee data can not only be confusing, it also takes a lot of precious time.
Solution: Payroll software stores employee data, which include CBAs, performance records, time sheets and conversations, among many others in a central location. Such information can readily be accessed by relevant personnel from different platforms and devices.
Problem: Reports are usually generated by separate tools, making it very inconvenient for users as they have to switch between applications. They also have limited control over how such reports should look as these come in pre-defined templates.
Solution: Integration of payroll platforms with HR or accounting tools can allow for reports customization. This feature allows users to decide what are to be included in a report. Reports can likewise be standardized and scheduled if need be.
Problem: Seeing to it that employee data are stored safely can be a difficult job. The threat of data breaches and loss from system crashes are real. There is also the problem of leaving sensitive employee information in the hands of third-party payroll providers, which can leave sensitive data exposed.
Solution: Cloud payroll solutions allow businesses to handle their own data, enabling them to better safeguard their employees’ information. Also, since these tools are cloud-based, data integrity is ensured as vendors are known to use only top-of-the-line security technologies along with regular backups.
Problem: You’ll never know when the cost of maintaining your workforce will spike and being caught unaware could give any business undue headaches.
Solution: Many payroll solutions offer the capability to make forecasts. Such can be used in planning budgets and costs associated with workforce finance. This can be accomplished by entering hypothetical figures to determine how much each employee needs.
So now that you know the myriad benefits of payroll tools, you should now be able to answer the perennial question–why is payroll software useful? These products are very useful indeed when it comes to making timely and accurate payrolls. In choosing one however, you need to identify your organization’s unique needs to be able to make a good purchase.
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