Employees fall among the basic building blocks of any business. The amount and quality of work effort spent by each employee decides the business’s status, growth, and worth. This becomes the reason behind employee satisfaction being the main factor of concern for the business owner. A satisfactory payroll, along with many other points, is thus a necessity to be handled.
The payroll includes some diversified components like basic salary, bonuses, increments, allowances, etc. Payroll mainly depends on employee attendance, employee leave, salary breakups, factors contributing to allowances, tax components, etc. To calculate all these factors, for each of the employees in your company can be a complex and highly demanding task. Currently, payroll processes are enabled with digital solutions to overcome the many cons of manual handling.
By employing payroll software, the payroll process is minimized and made more accurate. Automating this solution can still be costly for medium and small-sized firms. It is advisable to opt for purchasing payroll software or wholly outsourcing the process in such cases.
In this article, let’s discuss in detail why well-defined payroll software is essential in any organization.
Why Payroll software is a must for your business
- Manual processing can be error-some – An employee’s salary will include many components. Also, the payroll process is dependent on various factors like taxation laws, PF contribution, multiple salary components, attendance, leaves taken, and so on. It will be a tedious task to manually calculate each of these factors for each of the employees. Though one can depend on spreadsheets to process it manually, it can be not very easy with many employees.
- Multiple salary components and Salary laws – The salary of any employee would include various parts under earning and deductions like basic pay, allowances, incentives, PF contributions, professional tax, income tax, and so on. The percentage distribution varies for each employee depending on certain predefined factors. Salary must be compliant with various salary laws as well. The salary and taxation laws differ from country to country and are frequently updated to restrict fraudulent activities. By deploying HRMS software, it will be easier to manage these breakups and varying salary laws.
- Easy to stay aligned with the salary cycles – The joining process can happen any time of the month. But this doesn’t give you the luxury to process salary at any time. Salary processing has to happen according to predefined salary cycles and must be credited to employees on time every month. It is inappropriate to have any delay or ambiguities with this as salary is always important from an employee’s perspective. Deploying payroll software ensures to stay intact with the salary processing.
- More employee friendliness – Salary is the return awarded to an employee for the amount of work. Also, it includes the earnings, as well as the deductibles. There would be medical and other claims, tax saving schemes enrolled by employees, and deductions based on leaves that must be incorporated with each month’s payment. With a self-service portal in the payroll software, these can be easily managed.
- More employee friendliness – Salary is the return awarded to an employee for the amount of work they have done. Also, it includes the earnings, as well as the deductibles. There would be medical and other claims, tax saving schemes enrolled by employees, and deductions based on leaves that need to be incorporated with each month’s payment. With a self-service portal in the payroll software, these can be easily managed.
- Data security – The payroll process demands a lot of personal information from the employee. Many high-security data like the social security number, permanent account number, bank details, contact details, and other identification details are linked with the payroll. By employing payroll software, employers can assure better security to these data.
- Real-time Leave Processing- A central pain area of any payroll processing method is the difficulty in handling the leave tracker. The leave process starts with its classification and continues as submitting leave applications in the system, various approver cycles, updating the leaves module, confirming if it accounts for salary cuts or not. The process ends when it is synced in real-time with the salary components. Handling this in the current situation, with global and remote working styles, is more complex than imagined. This demands software that can handle leaves smoothly.
The best payroll software for your business can save a lot of effort, time, and cost. With improved accuracy in calculations, it can enhance the trust and warmth between employers and employees. It can also assure more transparency to the payroll process while the security of your data is not compromised. Choose a payroll management system for your business depending on factors like the size of your organization, features of your organization, and scalability of the software to ease the payroll process.