Payroll management can be done manually or using software tools. Manual processing may work for small businesses but not for larger firms. Small businesses are also using software to process payroll these days. Though it should be a simple and streamlined process, it is not always the case. As a company grows and hires more employees, whether payroll is done manually or by computer, tracking hours worked and other reporting requirements can become overwhelming.
Why payroll processes must be changed
While each business may be unique in its products and service offerings, payroll requirements and steps are similar to an extent. And no doubt, each one can benefit from improvements in the payroll process. It may not always be clear what changes must be made and this can be challenging. To help you make the right changes to payroll management, the complete process in use, tools, and best practices must be addressed. Here are a few ideas on how to improve payroll management.
7 Methods to improve payroll management
While the payroll process needs vary from company to company, some steps will be the same for every business model. As a payroll manager, you should take the time to plan and then implement changes that will prove strategically valuable to you and your team. The seven methods suggested below will show immediate results in the existing process.
1. Combining payday schedules
Like many other companies, if yours also has a varied payday schedule (monthly, hourly, weekly, fortnightly, etc.), it makes sense to minimize the amount of work that must be done. There is a lot of duplication in processes and must be repeated constantly. If all employees can be paid on the same day, it cuts down the amount of work. It is easier to maintain one payday schedule and error rates can be cut down drastically.
2. Streamline payroll system
It doesn’t matter if your company has the best payroll software if it is not synced with the HR and accounting system. This results in duplication of work and creates many bottlenecks. Mistakes in information can be made and, in some cases, data is also lost. If the payroll system can be LinkedIn to other systems such as attendance, hr, accounting, etc. payroll processes can offer dramatic improvement. The department heads and IT team can work together to review each step and figure out what changes must be made to streamline payroll.
3. Software Upgrades
This is another step that can help in streamlining payroll processing. The newer programs available on the market make it easier to link programs and have features that reduce payroll processing time. The result is accurate data that lets payroll processors keep up with tax and other changes. Of course, a program by itself will not be able to fix process issues.
4. Paperless processing
Thanks to software packages, paperless payroll processing is the new norm. Built-in security features make it easier to ensure data security while going green. It takes just a few minutes for each employee to log in to their information. Timesheets and paper cheques are obsolete in many organizations. This is a win-win for both the employer and employee.
5. Continuous education and training
Training is even more important for HR and payroll personnel compared to others. There is so much to do and learn – whether it is software tools or tax changes. In this dynamic profession, professionals must remain up to date with their skills or pay the price for mistakes. Even an HR manager must keep up with business, legal and technological changes to be effective.
6. Keeping up with tax changes and requirements
Businesses and their employees in the accounting and payroll departments must keep up with the tax code. Not doing so can result in huge penalties and financial losses. While payroll taxes and report filing are necessary, it doesn’t have to cost the company money. Reviews of tax changes should be mandatory and essential to keep up with regulations and changes. Staying informed helps the payroll department and personnel avoid delays and errors.
Regardless of business size, outsourcing is another option that makes a lot of sense. It is also cost-effective to have a full-service payroll processing firm to do the work for you – the need to have a full-fledged department and train personnel is moot. This trend of outsourcing is on the rise, and companies can focus on core activities.
There is no doubt that payroll is a dynamic process and team members must perform many tasks. With changing rules and regulations, it is necessary for a payroll processor to stay updated with all compliance-related rules.
As the markets change and evolve, it is important that companies and their employees keep up with technology and employ best practices to stay agile. Streamlining the process is a great way to minimize the burden on employees and keep the work flowing smoothly. And companies always have the option to outsource if they wish to.