Employees are at the heart of the success of every organization. Being the most important resource, companies spend a vast amount of time and resources just to select and train the right people, ensuring that they will be able to perform at their full potential. However, these processes alone do not guarantee productivity and success in the long run.
According to recent reports, poor payroll services, such as inaccurate and delayed payments, forces one in five employees to quit their job. This is grounded on the fact that employees are humans too, paying bills and making ends meet. Having poor payroll services will leave them under great stress and cause them a financial crisis. In the long run, this may adversely affect organizational processes, productivity, and profitability as workers become disengaged, causing competent employees to separate from their jobs.
It becomes crucial for companies to make sure that all their workers are not only compensated correctly, but also timely and without delays. However, payroll management is typically complex and time-consuming, and thus, gives rise to the possibility of human errors and delays. It is important for businesses to start using a payroll software that automates the tasks involved in the process. To better understand how this is beneficial, here are the competitive business advantages payroll softwares offers:
- It quickly and easily generates pay slips.
Payroll softwares, especially when cloud-based, utilize robust technology that allow organizations to receive pay slips automatically on predefined dates. With data encryptions and firewalls, these data are received securely, reducing the risks of breach that could compromise the funds of employees. Unlike traditional payroll processing, this also decreases, if not fully eliminates, the likelihood of receiving delayed compensation on the part of workers, as the process itself is automated and set on pre-scheduled dates. With this, payroll managers need not worry about chasing cut-off periods, since the software processes everything, allowing them to focus on more integral matters while making sure that all workers are paid timely and accurately.
- It reduces the likelihood of mistakes.
According to the American Payroll Association, companies that use traditional payroll management systems encounter an error rate of 1-8%, while 40% of small businesses incur about $845 a year in penalties due to mismanaged payroll services. These errors may be due to overlapping time clock entries and misclassification of payable times, among others.
Through a cloud-based payroll software, these errors can be reduced dramatically as it allows HR managers to customize pay element setup and rules, enabling the system to automatically process payments in relation to predefined periods, payroll groups, and compensation types. This ensures that employee payments are processed accurately and are verified, as the payment structure and regulations of a company are adhered to by the system itself.
Moreover, should minimal errors occur, payroll softwares enables HR managers to swiftly correct them and ensure that employees are still paid on time, as most of these systems allow auto-reversal of calculations to correct inaccurate information.
- It automates monitoring.
Most cloud-based payroll software automates accrual calculations and GL posting along with the pay slips, allowing HR managers to access specialized reports that can be automatically generated. Aside from this, it dispenses with the need to regularly conduct the typically long and complex payroll monitoring, as the system already generates accurate payroll reports with up to date information. Moreover, most of these systems are country-based, automatically complying with the laws and labor regulations of whatever country a company operates.
In the long run, these features will ensure that all payroll calculations are not only accurate, but also compliant with the law at all times, protecting the organization from penalties arising from incorrect filing while making sure that employee payments are just and lawful.