Payroll systems are an important and crucial aspect of any human resources management within an organisation. Payroll mistakes, regardless of how small they look, can result in a chain effect on employees, legal compliance and financial penalties for the business owner. Therefore, it is really important that the payroll process is done accurately and efficiently in all organisations.
As business operations have become increasingly complex, old-fashioned manual payroll is no longer sufficient to run a business. Companies need to develop structured payroll processes, automate processes where applicable, and look at new efficiencies and improvements in payroll management to pay employees on time, accurately, and without errors.
This blog discusses payroll software, suggests best practices for payroll management improvements and why payroll gets better with Savvy HRMS as the best payroll software provider for the modern organisation.
What is Payroll Software?
Payroll Software is a digital tool developed to support HR departments in accurately calculating salaries, collecting statutory deductions and taxes, creating payslips, and distributing salaries. Payroll software eliminates the need for manual calculations and greatly increases the efficiency of processing payrolls across all employees.
Most payroll software today includes an integration to attendance management software, leave management software, and core HR software, thus providing support for processing payroll based on current data. Accuracy, legality, and openness are ensured through the integration of these systems.
What are the Best Practices to improve the payroll process?
1. Payroll Process Consistency
A common payroll policy removes uncertainty for HR and allows HR to calculate the same pay for the same job, no matter the department, location, or classification of the employee.
The payroll policy also provides HR with a clear guideline for conducting audits of payroll, answering questions from employees, and conducting statutory inspections.
2. Replacing Manual Payroll Processing
Automation eliminates manual payroll calculations, reduces the probability of errors from spreadsheets, and reduces the amount of time required to process payroll.
Payroll software provides HR with a means to accurately calculate employee pay and deductions, incentives, and reimbursements.
3. Integration of Attendance Tracking Software
Accurate payroll calculations depend on accurate attendance tracking. When attendance tracking software is integrated with payroll software, payroll calculations will include employees’ total hours worked, overtime hours worked, any changes to an employee’s schedule, and any leave or absenteeism that occurred.
4. Integration of Leave Management Software
Leave accruals directly impact payroll deductions and loss of pay.
Integrating leave management software with payroll will ensure that employees have no errors regarding incorrect amounts of pay received.
5. Statutory Compliance
Payroll must comply with the Employee Provident Fund (PF), the Employee State Insurance (ESI), the Professional Tax, Income Tax, and labour laws.
Payroll software will automatically update changes to the statutory regulations. This automation reduces the likelihood of compliance failure and penalties.
6. Obtain Accurate Employee Records
Incorrect or outdated employee records in a company may directly impact the calculation of employees’ salaries, create compliance deficiencies, cause employee issues with on-time payroll, and may even contribute towards payroll disturbances.
By using a Centralised HR Payroll System, a company can preserve Employee’s payroll data and therefore ensure compliance with statutory payroll requirements.
7. Audit the Payroll Processes
Auditing the Payroll functions of a company on a regular basis ensures that payroll calculations are correct, any duplicate payments are eliminated, and payroll procedures are followed.
Payroll auditing provides additional strength to the governance of payroll, increases visibility into payroll accuracy and provides an indication of compliance readiness.
8. Using Automated Payroll Audit Checks
Automated Payroll Validation Checks detect abnormal salary transactions, missing input values and mismatches prior to the deadline for finalising payroll each pay cycle.
By utilising this auditing process to resolve payroll errors prior to the payroll’s finalisation, HR professionals reduce the opportunity for correction and therefore reduce employee dissatisfaction and reduce the chance of compliance issues after the payroll is finalised.
9. Maintain Defined Salary Structures
Defining the compensation structure of employees into logical components allows for a better understanding of payroll from an employee perspective and provides increased clarity and accuracy of Employee’s Tax Reporting.
Defining the components of salary, it makes the HR Systems Design of payroll easier to complete and improves the company’s payroll administrative process within a portion of the HR Department.
10. Protect Payroll Information
Payroll information consists of sensitive information details, tax records, and personal information. that must have strict security measures and limited access to ensure confidentiality.
Payroll protection software helps protect this information by providing access based on a user’s role in an organisation, encryption, audit logs, back-up, and compliance with industry-wide security standards.
11. Enable Employee Self-Service
Employee self-service portals are an excellent way for employees to be able to access their own payroll records, significantly decreasing the number of repeated requests to HR for information.
With self-service online access to their HR software accounts, employees can easily retrieve copies of their payslips, tax statements, attendance information, vacation leave balances, and proof of retirement plan investments at any time.
12. Provide Automated Payslip Delivery
The traditional way of manually issuing payslips takes a lot of time; it can increase errors in calculation, create confidentiality issues throughout the pay processing period, and create frustration for HR staff.
Automated payroll software eliminates the need for a manual process to issue payslips; it produces accurate digital payslips for employees.
13. Enhance Payroll Communication
Payroll communication provides clarity to employees about their pay; what days their payroll will be issued, what deductions will be made from their paychecks, what will change as a result of updated tax regulation and provides notice of compliance updates.
14. Train HR Payroll Teams
Payroll-trained HR personnel have greater knowledge of the rules that govern payroll, internal company policies regarding payroll processes and payroll system processing..
Ongoing payroll training provides a basis for payroll professionals to improve the accuracy of their payrolls, be aware of payroll compliance obligations, use payroll technology efficiently, and resolve payroll issues.
15. Maintain Payroll Documentation
Organised payroll documentation provides the information necessary to support payroll audits, individual employee payroll clarifications, legal audits, and historical payroll verifications for the longer term for businesses.
Organised digital payroll documentation allows businesses to easily retrieve needed payroll documentation and maintain payroll documentation securely, comply with state and federal record retention and payroll compliance.
16. Review Payroll Processes Periodically
Understanding the effect of a company’s growth, in addition to the regulatory changes, technological advances, and changing complexity that an organisation experiences as it grows, is important to effectively manage payroll operations.
By periodically reviewing the payroll processes of an organisation, businesses can identify improvements, implement better controls over their payroll processes, and automate payroll-related processes.
Why Payroll Improvement Is Important for Every Business?
1. The organization will ensure Employee Satisfaction
Employees develop trust in their employer and develop confidence, as well as reducing the number of complaints due to the accuracy and timeliness of their pay.
2. Reducing Risk of Compliance Violations
Increasing the accuracy of payroll will result in compliance with statutory requirements, and therefore reduce the likelihood of Legal Violations, create a better opportunity to avoid Penalties, and assist with compliance with changes to the Employment Laws.
3. Saves time and cost
Automated payroll will reduce the manual labour of payroll preparation and the associated costs of administration and re-work while allowing the HR Department to focus on Strategic Initiatives.
4. Improves the accuracy of payroll data
The Integration of HR Software allows for the elimination of duplicate employee records, consistent employee data, and reliable calculation and reporting of payroll.
5. Enhances the credibility of the business
The consistency of payroll practices gives professionalism to an organization, develops the brand of a company as an employer, increases the confidence of its employees, and promotes greater employee retention.
6. Supports the growth and expansion of the organization
Efficient payroll systems can accommodate workforce growth, expansion of organizations and complexity in payroll easily.
7. Strengthens Management Decision-Making
Payroll reports provide Valuable information about compensation, workforce trends, budgeting needs for HR and management decisions
Why Savvy HRMS Is the Best Choice?
Savvy HRMS designed HRMS and Payroll software that meets the needs of modern-day Indian Companies. Using automation, compliance readiness and real-time integrations, the payroll process is simplified.
Savvy HRMS’s integrated attendance management software & leave management software allow for automatically calculating payroll without any dependency on manual inputs. End-users will find Savvy HRMS easy to use due to its user-friendly interface (UFI); this is especially useful when working with non-technical HR Teams.
In addition, Savvy HRMS offers self-service access to employees through the Internet, access to all Statutory Compliance toll-free numbers, protection of employee data in a secure environment and complete payroll process improvement reports by providing each payroll submission data download.
Conclusion
Left unchecked, an outdated payroll process can lead to mistakes, compliance violations, and employee dissatisfaction as companies scramble to stay competitive in today’s modern world. Therefore, if you want to avoid issues or take advantage of all that technology has to offer, then you should improve your payroll processes.
Paying employees accurately, digitally, and on time is essential for the long-term success of any business. A strong, cloud-based payroll solution such as Savvy HRMS gives your business access to a complete suite of payroll tools that allow your HR team to confidently manage payroll while supporting the continued success of your business over time.
To get started today, please contact us to set up a free demo of Savvy HRMS so you can enjoy smooth payroll processing while experiencing the benefits of smarter HR automation!
