Digitization has revolutionized the way businesses are shaped and conducted. It has impacted the economy at a macro and micro level. Digitally driven solutions have improved the productivity and efficiency of every department in an organization, including the human resources (HR) department. Long gone are the days of traditional payroll systems and manually calculating the taxable incomes, keeping an account of working hours, and making other deductions. These methods are prone to errors and even a small error can have a magnified negative impact on employee satisfaction and experience.
Digitization has enabled the creation of robust and error-proof payroll software that provides 360-degree payroll solutions. Payroll software makes use of cloud computing and data analytics to analyze and calculate employee payroll regularly. Earlier, digital software was seen as a threat to privacy and security but now there is a unanimous agreement that payroll software elevates the traditional payroll process and detects fake check stubs.
Cloud/ mobile computing helps in gathering payroll data from anywhere in the world. This is especially useful for a rapidly growing organization or a business that majorly hires mobile and/or temporary workers since it is easy to add and delete employee records. A growing company is likely to hire more in the future. If the payroll process is manual, new payroll specialists would need to be hired to handle the files of new employees. This can form a vicious cycle where more payroll employees would be needed if the overall employee number increases.
Now, there is no need to make ten different excel sheets to track and analyze payroll and tax information. Payroll software has in-built data analytics tools that track employee progress and identify areas that can increase revenue and lower costs. Payroll processing and accounting are lengthy and strenuous but a digital transformation of payroll systems can help in minimizing costs and efforts. Digital payroll platforms are especially useful when it comes to tax compliance.
Keeping up with tax rate changes and constantly updating the manual payroll system can be very time-consuming but payroll software enables you to change tax rates in negligible time. The business will save on outsourcing costs since the overall administrative and filing costs will fall to a minimum.
Today, when business operations and marketing have gone digital, why shouldn’t employee management practices be automated too? As employees begin working from home on flexible schedules, the practice of handing out payslips and cheques becomes purposeless. The chances of loss and damage of payslips have also been reduced to zero, owing to effective payroll platforms. It also aids in achieving the objective of sustainability. In recent times, sustainable operations have been prioritized by businesses and digital software allows businesses to achieve the same. Less paperwork and the need for storage means the business is taking one step closer towards being environmentally aware and conscious. Additionally, you don’t have to go through numerous different payroll files to obtain an employee’s payroll information. Now employee information is just a search away.
A manual payroll process is more prone to bottlenecks since it requires a lot of verification and coordination, in terms of finding employee information from HR sub-departments. On the other side of the spectrum, a digitized payroll system is more centralized. HR sub-departments such as employee salaries, employee leave requests, and employee working hours can be interlinked so updating one file can update all files, enabling a complete payroll solution. This doesn’t only improve the ease of data procurement but also reduces filing, stationery, and storage costs.
One of the main aims for any business is to cut down on costs. Investing in digital payroll software is a one-time cost while hiring skilled payroll specialists (who are usually outsourced) and filing staff is a continuous process since more will be needed as company size increases. Since payroll specialists are highly skilled and do technical accounting work, their salaries tend to be high. Although payroll is an important aspect of employee experience, it is considered to be a low-value activity. Hence, one-time payment on payroll software would be beneficial in the long run.
In areas such as payroll, where compliance risk is very high, digitization is a boon and the advantages are multifold. Not only does it improve accuracy and time effectiveness, but it also integrates the various HR functions, is streamlined, uniformed, and enables the payroll process to be cost-effective. Switching to digital payroll platforms is advisable since, in the long run, manual payroll can become counter-productive. The world is going digital so there is no reason for the payroll process to not go digital too!