The term ‘payroll software’ refers to automating the entire gamut of payroll tasks involved in calculating the salary of the employee, calculating the statutory deductions, arriving at the amount of payout to be done and ensuring that the calculated amounts are paid out to employees on time.
Traditionally, processing payroll is a time-consuming process repeated every month. Now, with a single click, a payroll software calculates the gross salary, deductions, statutory compliance and net salary for each employee and processes it instantly.
Apart from calculating and disbursing salaries, payroll processing also involves calculation of all statutory dues (employee and employer contributions), generating reports in the format mandated by law and filing (submitting) these reports along with the amounts to the relevant government departments.
Additionally, employees need to be informed about the salaries paid to them, tax deducted, reimbursements, etc. This is done via payslips.
A payroll software does all of these activities at a fraction of cost and time required to perform these tasks manually. The payroll software also ensures accuracy of data.
Why should you use a payroll software?
A payroll software offers lot of advantages to the user (HR and/or payroll admin), the employees and the organization. Here are the most evident seven benefits you could get when you to switch to an online payroll software for your small business:
1. Less cost
With the advent of SaaS, everyone wants to pay only for what they use. Even if it is a core function, organizations want it to be managed using software that can scale up accordingly. Nobody wants to invest big right at the start. Cloud-based payroll software is available at monthly, quarterly, half-yearly and annual plans. It’s charged on a ‘per employee, per month’ basis. It’s cost-efficient!
2. Ease of use
Payroll software can be easily configured with multiple features, options, business rules and policies based on your organization’s requirements. All necessary inputs to payroll such as attendance data, loss of pay information, salary structure, etc., is automatically pre-populated as other modules of the software are seamlessly integrated with it. With just a click of a button, payroll for all employees can be processed. Payslips instantly published and bank transfer statement ready for upload to disburse salaries. All this can be achieved due to self-explanatory UI and well designed payroll process (guided checklist option is also available).
3. Relief from regulatory aspects
Monthly tax calculations, deductions and filing statutory remittances (PF, ESI, PT, etc.) are frustrating and time-consuming tasks. These are tasks, which can cause hidden losses to the organization. Also, incorrect filing may attract fines and penalties to the organization. Cloud-based payroll software provides you relief from keeping yourself updated about the latest laws, amendments, changes and tax slabs as the software provider will auto-update the payroll software without any downtime!
4. Easy and fast payroll reconciliation
A payroll software enables you to verify accuracy in each payroll by using a variety of payroll reconciliation tools at your disposal. You can compare current and previous month’s payroll and also, customize salary register and payroll statements as per your needs. This feature allows you to breathe easy and have complete peace of mind as payroll reconciliation option makes sure that there are no errors in the payroll!
5. Generating Accounts JV
To have a smooth link between your finance and payroll teams, payroll software allows you to generate Accounts JV easily via:
- In-built formats for Tally
- Extensive Excel output capabilities
6. Multiple reports generation
Cloud-based payroll management system provides you with multiple reports, such as:
- Reconciliation reports
- PT reports
- MIS reports
- Ad-hoc and user-defined reports
- Customizable payroll statement/ salary register/ wage register
- Reports under Shops & Establishment Acts of various states
- Reports under CLRA Act of various states
7. Inbuilt leave and attendance data as automated inputs
Disparate systems for data such as leave, attendance and employee information management make it tedious to constantly switch between systems for processing payroll and calculating taxes. An ideal payroll software will act as the single source of truth for all dimensions of an employee, which is supported by a strong integration framework. All necessary inputs for payroll will be auto updated from leave, attendance and employee database as and when needed. This saves you a lot of data entry and verification time.
Who’ll benefit the most from a payroll software?
Any organization, which has the following symptoms, are clear candidates for switching over to a payroll software:
- Tedious and time-consuming manual methods of collecting and maintaining HR & payroll data (Use of spreadsheets for IT declaration, investment proof collection, reimbursements, etc.)
- Multiple data entry and verification touchpoints
- Multiple follow-up emails and messages to employees and their managers to initiate actions for various activities like leave requests, approvals, investment declarations, etc.
- Non-availability of relevant employee information, such as leave balance, status, etc., to their managers
- Frequent delays in processing payroll and multiple human/calculation errors, which lead to employee dissatisfaction
- Busy HR and payroll administrators who’re only working on transactional tasks, such as employee document management, answering employee queries, following up leave-related transactions, etc., without time to initiate strategic HR activities
So go ahead, evaluate and get the best payroll software for your organization.
As organizations grapple with the challenge of balancing costs and performance, the need to focus on core business functions gets the highest priority. Such a scenario calls for maximizing process efficiency. This could be a starting step for replacing manual, tedious payroll tasks with a payroll software tailored to specific needs (today, everyone calls it automation!)
Take your first step now.