Any organisation has several irons in the fire at the same time. However, while aiming for growth, some aspects seem more pertinent, such as growing your customer base and maximising sales. At such times, aspects such as payroll processing that do not have a visible impact on the business hardly seem a vital matter, perhaps even a peripheral one.
However, payroll is one of the most expensive aspects of the business. It includes employee salaries, overtime, bonuses, deductions and net incomes. The bigger the organisation’s size, the more critical the payroll’s role is.
Payroll processing is not only responsible for the collection of employees’ personal information and making payments. But it is also significant in preparing annual reports and taxation. A slack payroll processing system can, therefore, lead to issues from employee dissatisfaction and tax penalties to an organisation’s reputation.
A managed and well-maintained payroll processing system can save time and increase efficiency and maintain financial stability. Traditionally, the processing has been done on paper, but digitalisation in the workplace has also brought about a transformation in this aspect. So how does payroll processing work when it is implemented well?
1. Ensures accuracy in less time
Payroll processing is complex and detail-oriented work. Keeping track of all the payments and deductions of the entire workforce can be a strenuous task the bigger the organisation becomes. In addition, there are bound to be human errors in record-keeping and calculations that can be not only time-consuming but even costly to correct.
Payroll processing software can automate the entire process. Complex calculations and timesheet tracking can be completed with a push of a button, while validation checks and detailed procedures ensure it is more difficult to make a mistake than not to make one. Preparing payroll becomes a quick task and managers can focus their attention on more pressing tasks. It reduces the risk of data duplication and errors that are bound to happen when dealing with large volumes of data.
2. Maintains an organised process
An efficient payroll processing system needs to be organised and easily accessible. Keeping employee records, managing multiple timesheets and creating job costs physically can be a laborious, time-consuming and, at times, disorganised process.
For growing organisations, traditional processing methods can be a leave a lot of paperwork to manage. By employing a payroll processing software, all the necessary information can be digitised in a single place for a completely paperless process. Digital records make creating payroll reports a matter of seconds. With fast and accurate reports such as employees’ earnings, you can stay on top of your finances and safe from any penalties and regulatory issues.
3. Maintains data security and privacy
Payroll systems have sensitive financial data and personal employee information from across the organisation, such as email addresses, bank details, dates of birth and Social Security Numbers. It is imperative to safeguard such data. Traditional processing methods are particularly susceptible to data breaches due to the nature of paper records—anyone who has access to the books can access the data. Even digital systems, although relatively more secure, can be at risk of network security leaks and unauthorised access during the transfer of data if used in outdated and disparate systems.
Newer, cloud-passed payroll processing software like SiriusPayroll365 ensures data security through controlled network access. Such software also keeps the system up to date with regular updates and security patches in anticipation of potential threats.
4. Stay tax compliant
Tax compliance is a crucial yet challenging matter for any business. Organisations are required to pay applicable employee taxes on time, every time. However, sometimes with all the bustle of everyday operations, tax updates can go unnoticed. Other times, laws and regulations can be amended abruptly, catching businesses unawares. Further, mistakes in tracking and recording can lead to fines and added costs, even audits.
Missing important mandates can lead to undesired consequences for any business. So even experienced payroll managers need to be on their toes to keep themselves up-to-date. Businesses need to invest in resources to stay informed. Modern payroll processing software can provide such regular updates.
For payroll in the UK, an HMRC-recognised solution such as SiriusPayroll365 retrieves taxes codes automatically for reporting. It also helps calculate the benefit cash equivalents for P11D forms.
Companies can even submit the right data to HRMC via a secure getaway while meeting the RTI (Real Time Information) requirements.
5. Maintains an intuitive process
Payroll accounting through traditional methods has always required sectoral expertise. Employees without formal accounting training can rarely work with the system. Even with the required knowledge, the system implemented in an organisation can be set up as per the requirement of a specific payroll accountant. It can make the transition to a different person confusing. An effective payroll processing system should be easy to learn, adapt, and implement.
Similarly, well-designed payroll software allows added flexibility in its usage. Standardised procedures and a user-friendly interface can assist in smoother handover during employee absence or turnover. It can also allow employees without a background in payroll to use the system. For smaller businesses, this opens up possibilities to cross-train employees in using the software without having to hire a specialised professional for the system.
6. Offers an integrated solution
Payroll data and reports can be valuable information for more than one business department. For example, integrated payroll software can support finance in cost analysis and cash flow maintenance and enable HR to focus on employee performance and compensation while ensuring IT security and privacy during the data exchange.
SiriusPayroll365, one of the best payrolls in the UK, streamlines the HR, finance and payroll data together. As a payroll solution for Dynamics 365 Business Central with Human Resources integration, it provides a holistic, 360-degree view of the business in real time so that departments can take informed decisions. Its built-in analytics allow for detailed reports to help measure business metrics so that managers can focus more of their time on planning and implementation.
7. Makes timely payment
Payroll primarily deals with employee payments. Employees expect to be paid accurately and on time without worrying about the complexities of the process that makes it possible. Any mistake in tracking and calculation in payroll processing can short-change the employee or over-burden the business, which can be cumbersome and slow to rectify. Payment irregularities or accounting blunders, especially if a constant occurrence, can alter how employees perceive the organisation and, in turn, lead to a slump in their performance.
To maintain high employee morale and productivity, payroll processing should ensure timely and correct payments. Digital processing solutions, helps make payment even smoother. The software can calculate payments before creating and printing payslips, P60s, and payroll reports. You can also send email encrypted payslips to employees every month.