Payroll is usually perceived to be a tedious and hectic process.
When the HR department or payroll team executes payrolls manually, they have to deal with boring spreadsheets.
Keeping track of each employee and his/her attendance records leaves overtime, taxes, deductions, and benefits is a time-consuming process.
This is why HR managers in businesses completely shut themselves in and focus their attention on payrolls only.
Most companies notice that their payroll process is riddled with errors, making employees frustrated, unengaged, and helpless.
A business might end up losing its employees due to their inefficiency in payroll processing.
This is where payroll software can be of great help. It automates the entire payroll process making it less time-consuming and accurate. The benefits of payroll software don't end here; it also helps you save money. Wondering how? Check this interesting infographic.
Before getting into how a payroll software solution can help you save money, let us understand what exactly it means.
What is payroll software?
Payroll software is an application used to manage, maintain, and automate employees' payments in a business. An automated payroll uses programmed functions that compile and calculate an employee's payroll online on a secured platform.
Cloud-based payroll software can keep all employee data safe on a secured server or cloud system that can be accessed whenever required via a browser on a laptop or mobile applications on an Android Smartphone or iPhone.
Moreover, the software's user-friendly nature allows the Human Resource manager to perform direct deposits and generate payroll reports. Payroll solutions also have employee self-service portals that contain all their payroll details.
Installing an ideal payroll software can reduce the manual effort needed from HRs. All you need to do is upload all the necessary information of your employees' payment details, packages, and documents, and the software will start processing payroll right away.
Most payroll suites are integrated with other core HR modules for the automation of all HR operations. Businesses have the option of several integrations, depending on different vendors. For example, here are come compliances offered by sumHR.
- Attendance and time management
- Leave management system
- Hourly captures
- Accounting system
To understand the process of payroll better, check out this blog.
How can you cut costs with payroll software?
Payroll solutions have a lot of features that can benefit business owners. They can save you time, money, and human labour.
But, for small and medium-sized businesses that are looking to expand and develop, a smart budget is a top priority.
Online payroll software can increase your savings and help you allocate your resources to meeting business goals.
So, here is how a payroll system can help your business save money.
1. Save time
Time is money.
When you waste time, you lose money. Gravity flow calculates that an hour wasted per employee amounts to $3750 dollars every year. You can only imagine how much an organization of 50+ employees would lose.
Your HR department might be losing more than just one hour a day in running payroll processes regularly.
This can include spending hours tracking attendance, which employee is on leave, consolidating reports on overtime, benefits and deductions, and more. The usual tool of choice is an Excel sheet.
In addition to this, the payroll team has to keep track of tax regulations, new tax laws, company payroll tax, and much more.
Now imagine spending all this time on tasks that increase productivity, improve employee engagement, and improve everyone's experience in the organization.
Payroll software does exactly that!
Instead of manually calculating wages, a smart system has all the above-mentioned factors in check. So, by the time you reach the end of the month, you can transfer workers' salaries with a mere click of a button.
2. Save on government sanctions
We all know that the calculation of taxes leads to the risk of manual errors. These hidden costs and deductions include the following statutory compliances.
1. Employee Provident Fund
3. Employees State Insurance (ESI)
4. Professional Tax
For the USA (and relevant countries)
1. Federal and state income taxes
2. Union dues
3. Unemployment taxes
4. Social security payroll taxes
5. Miscellaneous local taxes
Disclaimer: The mentioned above are only some of the deductions. Please approach a payroll specialist for accurate deductions.
If the final paycheck does not have accurate calculations, you will have to pay fines to the government.
Employers can end up losing a lot of money if they miscalculate these government obligations.
An automated payroll software solution has built-in features that can remove all compliance risks. By adhering to these payroll obligations, your company can save the money spent on paying fines.
3. Cut the cost of outsourcing
The stress of payroll tasks might lead you to consider hiring an external accountant or dedicated payroll company that handles payroll operations.
Although there are numerous HR industry options, you might be paying a higher price in many places. For companies looking to grow, this might not be the best option.
An in-house payroll and accounting software is a great investment that does not become too heavy on your budget. As a startup or a small business, this can be a godsend for you,
With a tiny bit of training, your HR team can easily run payroll programs offered by software vendors. In fact, modern-day HR software is built to be easily implemented, with accuracy and ease-of-use as well.
Further, you profit from the constant customer support offered by these vendors. Most companies also offer free trials so that you can implement the best systems for your organization.
So, you can keep the payroll processing within your company and save money.
4. Cut some costly errors
Payroll errors can be very costly for your company. Let us look at how these errors are cutting your profits.
- If you find errors in your payroll records, you will have to spend more hours on payroll correction. This, again, is manual labor wasted.
- Delayed payments can lead to poor employee retention. Your workers can get frustrated with your payroll management and decide to leave. This is a huge loss for your company.
- With the loss of employees comes hiring costs. Hiring new workers, spending time training them and onboarding are more steps that you need to take.
You can skip all these issues with robust payroll software. As all calculations are performed on time, you can improve employee engagement and reduce the turnover rate.
This way, you can save costs incurred due to payroll errors.
5. Secure your data
When your business processes are on an Excel sheet, you ought to be ready for some data breaches and loss of sensitive information.
This is an even bigger disaster when your business involves more than 25-30 employees.
When you lose reports, forms and checks, you need to perform all the payroll calculations again. This includes adding attendance and bonuses, subtracting payroll taxes, and more.
So, it is vital to implement a secure payroll software solution that saves all your information in encrypted files.
You might be concerned about who can access this data.
An integrated HRMS works as a single unit with many independent divisions. Payroll is one of them.
The users of this HRMS (your employees) can access their salary details, use their self-service portal, check for policies, and place requests.
However, the data and analytics will only be available to the admin or your company's HR manager. This role-based access will secure your data and allow exclusive access to supervisors only.
So, you will not have to experience loss of data or theft of data. Payroll software will protect your company from both.
6. No training costs
While operating payroll software is a bit more complicated than running an Excel sheet, it does not call for long training sessions and introductions.
Your payroll and accounting team or HR team can pick-up the functions of the software easily.
Payroll software can have huge benefits for growing organizations. If you were hesitant about bringing such systems into your company, now you know that they can help you save a lot of money.
After understanding the advantages of payroll software, your next step would be to look for one that suits your company's needs.
Well, sumHR's payroll software might just be the perfect fit for you. With its statutory compliance, customizable features, and printable payslips, it helps you master the payroll process.
Click here to learn more about our payroll software or check out our 7-day free trial.
Frequently Asked Questions (F.A.Q.)
1. How does effective Payroll Management affect your workforce?
Effective payroll management can be a gamechanger for your workforce. Here are the benefits of swift and efficient payroll processes on your employees.
- Payroll done well can improve employee engagement. It is vital to pay workers on time for their hard work and service. In addition to this, employees will understand that they are valued when they are paid on time. This will also keep them loyal to the organization.
- Your organization can avoid paying fines on overlooked government payments. The software can keep track of all legal liabilities and add them to the net salary.
2. What to Look For in an Automated Payroll System?
Certain payroll software features must be considered while looking for the perfect system for your business. Here is what you need to look for in an automated payroll system.
- The system must be able to generate payroll slips automatically.
- The payroll software must be able to file tax forms.
- It should directly deposit the amount into employee accounts. This ensures that there is no wastage of paper and no wastage of time.
- The software must easily integrate with in-house systems.
- Payroll software must contain an employee self-service portal that gives them access to their data, payroll slips, tax forms, and more.
- The software must-have mobile access for convenience.
- Security is the most important aspect of any software system, especially payroll. The payroll process contains sensitive data that is at risk of being compromised. So, always prioritize security and data encryption while looking for payroll software.