Payroll automation has become a buzzphrase recently.
Why so much noise around it? One of the reasons is that digital transformation isn’t leaving anything untouched in business. Automated payroll solutions have been applied by companies worldwide, as they introduce intelligent automation to HR.
Did you know that 67% of medium and big-size corporations have already automated payroll? Roughly half of those take advantage of on-premise apps for payroll management, while the other half implement cloud-based solutions.
This article will give you thorough answers to the top three questions concerning payroll automation:
- What does payroll automation mean?
- Why is it worth investing in?
- How to find the best payroll automation software for an expanding business?
Let’s start, then, shall we?
Automating Payroll: What it Implies and Why Growing Businesses Definitely Need It
Payroll Automation – Defined and Explained
Payroll automation is a set of methods and practices to streamline payroll via automation approaches and technologies, and process automation solutions.
Its fundamental principle is a simplification of payroll processing by delegating manual tasks and activities to digital automation systems. When the software automates salary-related procedures, it addresses everything: attendance tracking, wages and benefits calculation, payment distribution, deduction of taxes, etc.
How can your business benefit from it? Find the answer in the next paragraphs.
Key Advantages of Payroll Automation Solutions
It’s highly beneficial to incorporate a payroll automation solution into your workflow management. It can assist you with the following:
- Reducing costs
What if we told you that you can cut expenses on payroll processing by 80%?
Not to mention that manual errors in calculations may be too pricey. For example, in 2021 the Internal Revenue Service (IRS) collected over $6 billion in fines paid by employers because of payroll mistakes.
- Eliminating human intervention and mistakes
33% of employers are prone to making payroll errors habitually, according to the IRS. The most common triggers for them are:
- Misclassification of employees
- Confusion between taxable vs non-taxable income
- Incorrectly deducted taxes from paychecks
- Miscalculation of worker’s hours
- Untracked absence/overtime, etc.
These flaws not only cost business owners whopping sums of money and civil penalties but also result in losing talent. 49% of workers consider leaving the company after two occurrences when their salary is miscalculated.
- Saving time
Depending on the number of employees, poorly-performing organizations may spend as many as ten days to cope with the repercussions of a single payroll mistake and fix one completely. Better performers need from two to four days to do this.
Do you have so much time to squander? In fact, streamlining financial tasks can save managers 20% of their time, based on McKinsey’s research.
- Enhancing data safety
Using spreadsheets may easily lead to a security breach. 86% of data breaches are financially motivated, with personal credentials and payment details targeted the most often.
Automated tools for payroll can boast reliable information encryption methods and increased protection. They secure access with passwords or even offer multi-factor authentication.
- Achieving adaptability and resilience to financial challenges
Your company can become even more flexible and resilient to any situation and financial risks with predictive analytics provided by automated software for managing staff payments. Predictive analysis is crucial for strategic HR management. It allows planning budgets more efficiently and distributing the money in full compliance with your finance and accounting tasks.
These are only a few benefits that businesses get with payroll automation. As you can see, it’s indeed worthwhile to use a dedicated tool for automated employee hours tracking, salary and benefits calculations, tax withholdings, analytics, reporting, and so on.
There are tons of tools for automating payroll. How to pick the best one to meet your particular demands? Read on.
How to Select the Right Payroll Automation Software
Here’s a list of the must-follow tips that will help you decide on the most suitable payroll automation tool, based on your business requirements.
1. Identify your payroll needs and decide on the budget
Answers to the following questions will help you outline compulsory necessities and specify the demands you have:
- What’s the quantity of workers in your company?
- How fast is your business growing?
- Do you have part-time or seasonal employees?
- Would you like to sync payroll with other workflows?
- Do you plan to use any custom apps and integrate them into the software?
- Will you have only one payroll system administrator?
- How much are you ready to invest in payroll automation?
Evaluating the payroll software, consult your answers and make a decision in favor of the one that suits your needs the best.
2. Scrutinize the payroll automation software features
Does the payroll automation software allow managing contractors?
Pay attention to the app’s functionality and some essential features:
- Time and attendance tracking
- Calculation of tax withholdings
- Real-time analysis for compiling statistics
- Reports creation
- Instant notifications about the progress of the processing
- Reminders about the time for paychecks, etc.
Give due importance to typical and niche-specific features.
3. Prioritize payroll software with broad integration capacities
What if you’ve decided to go with payroll invoice factoring for better cash flow? In this case, the factoring company collects and processes invoices. You might need to ensure you’re on the same page all the time.
If you use factoring software, for instance, flawless integration with your payroll system is obligatory. Make sure your invoice approval workflows will be streamlined without issues and invoices will be handled accordingly.
4. Consider payroll tools that offer robotic process automation (RPA)
Payroll falls into one of the RPA use cases. Robotic process automation in payroll management guarantees high-level accuracy, boosted security, increased productivity, speedy solutions, and more.
5. Request demos and start with free trials
You would want to see how everything works when the chosen tool automates your payroll procedures, wouldn’t you?
Check a product’s demo version to get a comprehensive visual explanation. Alternatively, sign up for a free trial to test it out.
How fast can it manage processes? You’ll never know without trying.
Ready to Automate Payroll and Manage it Seamlessly?
The future is now. The necessity to transform businesses to keep up with it makes entrepreneurs rethink their methods and adhere to automation. One of the golden rules of automating business processes is to know which tasks and processes are best automated. Payroll automation is one of them. It has gained topicality not without a good reason. Growing companies should give top priority to automated payroll solutions due to their valuable benefits demonstrated above.
Automating workflows and business processes like payroll is a must if you aim at cost-efficient and quicker decisions. Comidor can help you with HR automation for spotless timekeeping and payroll management.