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9 Reasons to Ditch Manual Payroll & Adopt Software Instead (HR Approved!)

Payroll

9 Reasons to Ditch Manual Payroll & Adopt Software Instead (HR Approved!)
Employees have been utilizing payroll systems for thousands of years, but it was only within the last century that computerized payroll started to gain traction. Even then, an automated payroll system was not widely available, and many companies were still calculating payroll manually or outsourcing the task altogether. Within the last decade, cloud computing has exploded into every part of the business process, including payroll. Today, payroll software eliminates the need to process payroll manually, which has significant disadvantages. Manual payroll requires a substantial time commitment, increases the risk of calculation errors (and employee dissatisfaction), doesn't allow for real-time visibility, and increases the risk of non-compliance. Keep reading to learn more about the benefits of using automated payroll software over manual systems, and be sure to take a look at our reviews of the best payroll software available. 1. Reduced Errors Through Accurate Calculation One tiny error—like forgetting a decimal place—can snowball into something much more consequential when processing payroll manually. Payroll software provides highly accurate calculations, lessening the likelihood of errors during the payroll process and lowering the risk of employee dissatisfaction or expensive resolutions. 2. Save Valuable Time Utilizing payroll software will save your chosen payroll personnel a considerable amount of time. Wage and deduction calculations, compliance audits, payroll reports, and recordkeeping are tasks usually completed by the payroll team. A payroll software system takes over these responsibilities, saving you and your team hours of tedious work. 3. Reduced Operating Costs The monthly cost of employing payroll software generally starts at around $15 per month, plus a small fee ($4-$10) per employee or contractor. For one year of payroll processing, the total cost would be between $1,000 to $2,000 for a business with around ten employees. On the contrary, a full-time/part-time payroll clerk could charge anywhere from $35 to hundreds of dollars each month for the base fee, with an additional $3-$10 per employee. For the same ten-person company, you could expect to pay well over $2,000 for reputable payroll processing. 4. Better Data Security The very nature of the payroll process involves employees' sensitive personal information. Hard copies of your manually processed payroll and employee data are tough to secure, whereas payroll software companies use security features like encryption, password protection, and two-factor authentication to prevent unauthorized users from gaining access to this data. 5. Payroll Software Is User-Friendly Payroll software that is challenging to use will create problems rather than solutions. However, most payroll software is straightforward with simple navigation and well-organized dashboards. Some even offer training for new users and integration with your timekeeping or other HR systems. 6. Around-The-Clock Customer Support Paying for a software subscription means that you also have unlimited access to dedicated and professional support via phone, chat, and email. Some providers even offer around-the-clock support for their products and services. You can complete your payroll process much faster when you're not waiting on a CPA to get back to you on the next business day about an issue that arose during your manual process. 7. Automatically Generated Payslips In addition to generating paychecks, payroll software will create and distribute payslips to your employees. Payslips include that pay period's wage and deduction information but may contain other data such as PTO balance or retirement contributions. Compiling this data manually each pay period is tiresome without the use of automated payroll software. 8. Streamlined Tax Management One of the most stressful payroll tasks is tax management—the calculation, withholding, filing, and remittance of employer and employee payroll taxes. Taxes are complex and can vary from state to state or country to country, which becomes a nuisance when you have globally-distributed employees. Payroll software can make the calculations and file taxes on your behalf. 9. Employee Self-Service With payroll software, employees can create an account with the payroll service to update their information, view their payroll history, and view time records if equipped. Payroll software streamlines the employee onboarding process and payroll process and increases the security of personal information. Bottom Line Comparing the manual and automated payroll processes is virtually impossible. The fact of the matter is that there's no doubt about the convenience and benefits that automated payroll software will offer your HR and finance staff. Still worried about setting up payroll? Read our top tips for setting up payroll as a first-time HR manager.
Who Should Be Responsible for Your Payroll: HR or Finance?

Payroll

Who Should Be Responsible for Your Payroll: HR or Finance?
There is much debate over which function—HR or Finance—should be responsible for payroll. Some feel that, since the task is employee-related, HR should perform payroll. In contrast, others believe that Finance should handle the task because the job requires a precise understanding of accounting and taxes. But who is really responsible for payroll? Read on to find out. Overview of HR & Finance Function Responsibilities Generally, HR is responsible for recruiting new employees, organizing and training staff, managing the safety and compliance of the workplace, maintaining employee records, and mediating issues between employees and employers. Finance is responsible for the day-to-day monetary operations of the organization, preparing and analyzing financial statements, planning and forecasting budgets, and ensuring sufficient cash is available to sustain continuous operations. 4 Benefits of Payroll Processing by Your HR Department HR's primary responsibilities involve maintaining employee records and addressing employee issues, making the department highly qualified to handle payroll processing. The primary benefits of having your HR department handle your payroll processing are as follows: 1. The Majority of Payroll Data Originates From HR Activities Payroll data, such as the employee's pay rate, withholding information, and benefits entitlements, are maintained by HR. As such, it would only make sense for HR to process payroll to avoid inefficiencies. 2. Employee Relations Skills The HR department has the training to handle issues that arise with employees—whether between two employees or an employee and the company. Should a problem arise, such as a mistake in an employee's paycheck, HR would be much better suited to handle an aggravated employee than the Finance Department. 3. Expertise in Regulatory Compliance Federal, state, and local labor laws vary widely, and these specific laws are not an area of expertise for Finance. Part of the role of HR is to keep up with current regulations regarding such laws. Payroll processing time and inefficiencies would increase if HR had to communicate every update to Finance. 4. Experience Dealing With Confidential Data Processing payroll involves a substantial amount of private and confidential information. HR is already responsible for safeguarding this information; keeping payroll processing in HR limits the chance of a data breach. 4 Benefits of Payroll Processing by Your Finance Department Payroll data is vital to the Finance Department for accounting records and business planning needs. The Finance function is well-equipped with the knowledge necessary to record and track payroll-related transactions, as well as make informed business decisions. The primary benefits of having your Finance department handle your payroll processing are as follows: 1. Highly Relevant Account Expertise The Finance team has the most knowledge regarding the accounting and record-keeping process. They have the expertise necessary to record transactions accurately and to the appropriate accounts. 2. Understanding of Tax Laws Tax law is extensive and ever-changing, but the Finance team remains continuously updated with the current rules and regulations. Since processing payroll requires a detailed understanding of the tax law, the Finance Department is the preferred function to handle payroll. 3. Mitigate Risks Through Regular Audits A typical function of the Finance Department involves performing regular audits of financial information, security, and internal controls. Given that the department is already prepared to perform this task, it would be most efficient for this department to handle payroll. 4. Understanding of the Bigger Picture Often, payroll is the most significant expense for a business, requiring a complete understanding of the company's budgetary limitations and overall financial performance. Given that Finance consistently monitors these factors, assigning the payroll responsibility to them would facilitate better decision-making related to payroll. The Verdict The debate over whether the payroll should be an HR or Finance responsibility is considerably dependent on the organization's structure. For larger organizations, it's common for payroll to be a financial team responsibility because of high turnover or the volume of payroll. Smaller organizations with longer-term employees often assign the responsibility to HR when employees frequently have questions about benefits packages. A hybrid approach, where HR and Finance work collaboratively, is also worth consideration. Adopting a hybrid approach with automated payroll software may be the most efficient way to handle payroll as both departments have particular expertise in specific areas of payroll processing. Whether you are a new business owner or the CEO of a much larger company, be sure to take a look at the best payroll software and how to save time on payroll processing.
7 Time-Saving Tips for Effective, Streamlined Payroll Processing

Payroll

7 Time-Saving Tips for Effective, Streamlined Payroll Processing
Processing payroll is an immensely time-consuming task that might involve verifying timesheets, pay rates, and other employee data; entering time data; calculating gross pay and all relevant deductions; printing and issuing checks (or verifying direct deposits); and updating payroll records. Though payroll processing is exceptionally tedious, it is essential to your business's financial health. Your employees won't work if they aren't getting paid, and payroll is usually the largest expense for any business. Ensuring that your company has the cash available to pay your workforce is essential to continuous operations. That being said, below are seven fool-proof tips for processing your payroll quickly and effectively. 1. Automate Your Payroll Process Implementing payroll automation software can take over tasks such as pay and deduction calculations, direct deposits, generating payroll records, and filing taxes. Many payroll software choices either have built-in time tracking or can integrate with your time-tracking software. Some even integrate with your accounting system. Look for software with all the features you'll need: time tracking, tax filing, self-service access for employees, etc. Thankfully, finding the right software doesn't need to be an arduous process. Take a look at our reviews of the best payroll software available to help you decide. 2. Create a Payroll Schedule Setting a payroll schedule is essential, not only for your workforce but for your bank account, too. Employees want to know that they'll receive payments predictably. And, you'll want to make sure you have the cash available to cover the payroll deduction. Some states even require payments to be made with a minimum frequency such as monthly, semimonthly, etc. 3. Stay Abreast of Federal & State Tax Regulations Labor laws are constantly changing, which means that you'll need to keep up with every update pertaining to your employees and organization. You can maintain compliance and avoid costly penalties by remaining updated with current regulations. And, if you implement Tip 1, your chosen payroll software will handle some of this for you! 4. Define an Effective Payroll Policy A payroll policy refers to the rules and guidelines established by your company to govern payroll-related matters. Topics may include: Workweek definitionsTimekeeping procedures—take a look at some of the best employee time tracking software for some ideasPay period definitionsWage ratesCommissions or bonusesPayroll deductions An effective payroll policy will ensure that you're compliant with all regulations and that the payroll department can process all payments efficiently. 5. Guarantee Transparency of Payroll Processing It's essential to let your employees know how your payroll process works, how wage and deduction amounts are calculated, and the employees' tax responsibilities. Employees sometimes misunderstand the payroll process when information is not readily available, so you should consider posting information publicly and updating your employee handbook regularly. Making your payroll process transparent will reduce the number of problems arising from employee misunderstandings. 6. Audit Your Payroll Process Regularly Regularly auditing your payroll process can save your company time and money. At least annually, you will want to review information such as pay rates, tax data, employees currently in the system, and time data during the audit process. You might occasionally identify employees in your payroll system who have been terminated, timesheets that don't match, or tax withholding that does not match remitted payments. 7. Consider Outsourced Payroll Services While outsourcing payroll comes with a fee, some employers—mostly larger businesses—find that the amount of time and money saved is well worth the small investment as payroll errors can be extremely costly and time-consuming. Choosing a full-service payroll provider means you don't need to worry about calculating wages or deductions, filing taxes, ensuring compliance, or sending payments—that's all done for you. Bottom Line These seven tips are sure to save you time and create an effective, streamlined payroll process. But, you may want to consider equipping your payroll personnel with the skills and expertise required via training sessions and workshops. Educating personnel in the proper procedures rather than surrendering control to an outsourced provider allows you to have more control over your payroll process, increases data security, and limits the risk of errors during data transmission. Be sure to take a look at our top tips for setting up payroll as a first-time HR manager!