They say that love is more important than money. Have you ever tried to pay your employees payroll with hugs??
Funny isn’t it??
Payroll Management seems an easy task since it involves calculating hours worked, sending out paychecks, and updating records. For every business, whether small, medium, or large, payroll processing is a considerable expense and is accompanied with some serious payroll challenges as well. Thus ensuring that it is streamlined is essential. However, every organization encounters its unique set of payroll challenges when addressing payroll management.
What is payroll management?
Payroll management is the administration of financial reports relating to staff you are responsible for, such as remuneration, bonuses, deductions, and other financial records that should be audited regularly. Most of the time, the payroll management process involves a repetitive, irritating process that frequently results in mistakes. The process is made easier through the use of computers and software applications, which minimize the possibility of mistakes and thus avoiding some of the payroll challenges.
Here are a few setbacks and payroll challenges that HR industry encounters:
Payroll is a tedious and highly time-consuming process, even if a business has the right technology platform to process payroll successfully. As a result, a significant amount of time is spent calculating wages and deductions, not to mention dealing with garnishments and levies.
Manual Payroll Processing:
Many businesses choose to manage their payroll functions internally and manually to avoid any upfront investments in high-cost platforms. However, manually entering employee data/records and doing manual calculations make the payroll process prone to even more errors. Further, it gives rise to possible issues like duplication of records, which could lead to an employee being paid twice for the same payroll cycle and therefore can result in even bigger problems for the organization. Further, not using any form of technology platform results in process redundancies and inefficiencies which lead to wasted time and money, as well as frustrated staff members.
As soon as an employee starts a new job, the payroll department of the company must monitor the employee’s previous employment history so that the new employer can tax them correctly. When an employee leaves their previous workplace, their Full & Final Settlement provides the necessary tax calculation information. In the absence of that information, the employee must pay the difference when they file their tax return.
When an employee leaves their business, they are expected to provide payroll with the same proof documents so that the company can verify investment figures and calculate taxes. Furthermore, departing employees can’t take advantage of any tax benefits or exemptions without proof documents. As a result, they will be taxed on the standard rate.
Keeping Up with Regulatory Changes:
Payroll regulations are dynamic and are updated regularly. Since the Covid 19 pandemic, labor laws, and wage laws have been updated, which need to be kept in mind while doing the payroll. Payroll has become more susceptible to error and risk since COVID-19 came into effect, as new regulations impacted payroll, making payroll more vulnerable to error. By transforming pay, organizations can stay ahead of regulatory changes, audits, and compliance.
To avoid payroll issues that occur because of regulatory changes, business owners should always stay updated on any changes occurring in their particular state or on a federal level that may impact them.
Safety and Security Concerns:
Security is a major challenge when it comes to maintaining confidential employee information in cumbersome spreadsheets. Payroll frauds can be committed in various forms, such as false wages and commissions, faking injuries to claim insurance or having ghost employees. Manual payroll processing steps increases the chance of such data mishandling and leakage of information leading to multiple issues for businesses. These kinds of payroll issues especially happen when there are no internal controls or when employees have access to critical components of the payroll software.
Dependence on Multiple Payroll Input Sources:
Another common challenge in payroll management is the non-compatibility of payroll management software. For example, the software used for keeping employee records may be completely different from the one that you use for leave management, performance, or employee benefits.
Insufficient or excessive payments:
Individuals do not like to be underpaid for work—or asked to return money if they accidentally overpaid. If you don’t correct errors quickly, you will have to do time-consuming year-end processing or refunds the following year. Automation will minimize the chances of human error where manual data entry is involved. If an error is discovered, let the employee know as soon as possible, so they can correct it without undue hardship.
Businesses are vulnerable to payroll fraud, which may include employees falsifying their timecards or inputting lower-paying shifts. The best defense against fraud is using payroll software that helps you run reports across various departments and analyze data for suspicious trends.
New technologies make every process easier, including payroll processing, but companies are slow to adopt new technologies, which leads to the misallocation of funds destined for other planning and goals.
Management of Employees:
With the growing popularity of remote working, it is challenging to manage employees from different places. HR faces a lot of payroll challenges with keeping track of employees and managing attendance as well as keeping track of hours worked and other details. Payroll can be easily done with free software or cloud-based platforms if your company is just getting started. However, it becomes difficult as the business grows, so it’s better to adapt to new technologies like payroll outsourcing or even bringing in specialized payroll staff.
What is the solution?
Managing payroll in any organization can be challenging, but using an automated system is the best solution to the problem. Managing payroll involves a wide range of activities, which help an organization to maintain control over its most critical asset – its people. Done manually, or with outdated methods or spreadsheets, payroll becomes time-consuming, inaccurate, and complex. Payroll software or outsourcing makes payroll simpler. From getting payroll ready to close out the pay period, good payroll software keeps the process organized, easy, and efficient.
How Workex’s automated payroll software can help you overcome these challenges?
Manual calculation of Payroll is a tedious and time-consuming process. There is a great deal of attention & detail involved with everything from processing leaves to keeping track of overtime of each and every employee.
Whether you are seeking a better way to streamline payroll processing or are looking for a perfect partnering option, we’re here to help. Workex enables you to relieve a load of payroll administration by making the entire process enjoyable and easy.
Workex’s payroll management software eliminates payroll challenges and processing complications, and it delivers the following benefits:
- Manage Attendance, Leaves & Overtime
- Automatic Payroll Calculation
- Dedicated Call & Chat Support
- HR & Payroll Support
- Statutory & Labour Compliance
Contact us to get more information about the same!