Common Payroll Software Myths Condemned
An efficient organization encompasses efficient business processes. While you can’t discriminate between these processes, some require more expertise than others. Payroll management is one such critical task.
Payroll is essential for any business, no matter if it is an SME or tech giant. Why? Because of the high risk of making mistakes and harsh penalties. This is why this part of business deserves special attention.
- According to some estimates, 54% are affected by Payroll Problems.
- But that’s not all. 40% of SME owners believe that managing payroll and taxes are the most difficult and time-consuming aspect of running a business.
We know that something is wrong. It turns out the root cause of most payroll problems is very simple.
Payroll Software Myths and Their Truth
Business owners can be confused by the many payroll myths.
1. Payroll requires only one-time efforts
It is a continuous process to set up a payroll framework. It doesn’t end after setting up payroll software. Regular evaluation and updating are necessary for this process.
This is how efficiency can be maximized. How? How?
Setting payroll is an ongoing process due to changes in the workplace, compliance standards, technological advances, and other factors.
2. Payroll is all about the calculation of salary
Many people mistakenly think payroll is a way to pay employees for work.
However, the reality is very different. Payroll is not a human resource category. It also involves accounting procedures.
Payroll is not only about salary calculation according to leave policy but also involves time and attendance of employees, deducting TDS, and deducting employee contributions for PF or ESI, incentives, bonuses & others.
You can see that it goes beyond calculating the employee’s salary.
3. To process payroll, all you need is someone in the HR/Finance Department
You cannot trust anyone with confidential information like your payroll. Payroll must be assigned responsibly to ensure that it is safe.
It is therefore important to ensure that the individual/outsourcing company you trust with your payroll has the required (behavioral?) skills to handle sensitive information and know about taxation.
You should also have a confidentiality agreement to ensure that your payroll data is kept secure and prevents it from being leaked. Data breaches can be costly for you and your company.
4. Payroll is all about taxes
It is not unusual for companies to outsource their entire payroll process to take care of taxation. This is often done to cut costs. It is often done to save money, but taxation is an ongoing process that must be completed yearly.
This is dangerous as you risk increasing your expenses instead of decreasing them.
5. Payroll doesn’t involve strategy
Payroll doesn’t just include transactions. The process also includes strategic activities.
- All components of the payroll are carefully reviewed. This is to ensure your payroll conforms with industry standards and is employee-friendly.
- A crucial strategy is to ensure that your organization and payroll goals do not cross paths.
6. Payroll is not a factor in employee retention and enhancement.
Everyone knows that employees have non-monetary motivating reasons. However, this doesn’t mean that monetary factors don’t affect employees’ experience.
Payroll is important in improving employees’ experience and keeping them employed (reducing turnover). A well-designed payroll management system can speak volumes about your company.
Accurate payments, issuances of pay slips, ESS portals, etc., increase their trust and instill transparency within the organization.
7. Physical time sheets must be completed
This is something you need to work on immediately. You are wasting your time, and paper timesheets can seriously hinder efficiency. Many businesses have abandoned paper timesheets and moved to modern-day technology. The reasons are clear.
- Timesheets can be very easy to make mistakes.
- They are susceptible to fraud.
- It is also difficult to map them.
The solution is digital attendance and time management systems. Digital time and attendance systems simplify the process, reduce errors, and make record-keeping easy. Their seamless integration with payroll software is another plus.
8. Payroll Outsourcing Myths
Let me start by telling you how in-house payroll handling looks.
- Upgrades and maintenance of your payroll software will require time and money.
- This will require an entire IT department.
- Hardware and IT support are also necessary from time to time.
- Additional time and costs for training employees, payroll administration, taxation, and compliance.
- There are many chances of mistakes and non-compliance.
- There may be fines or penalties depending on the offense.
It’s up to you to decide if this is cheaper or more convenient than outsourcing it to professionals.
No matter what your industry is, payroll is essential.
Payroll outsourcing firms take care of all your payroll and eliminate the possibility of mistakes and non-compliance.
Payroll Myths Conclusion
You now better understand the myths and truths surrounding payroll management. Take conscious steps to eradicate them all.
You can outsource payroll management services and receive expert advice and the most recent technologies.
