Managing payroll has always been a hefty and meticulous task for the human resource management staff, even a minor error has the potential to cause expensive damages. with the ongoing pandemic, this task has become even more challenging and tedious due to the fact that employees are working from home. Here, we will discuss 5 Problems with Payroll Management in 2021.
5 Problems with Payroll Management in 2021
Out of these challenges some of the major challenges can be termed in the name of administrative burden, organizational issues, incompatible software, tracking employee absence, compliance issues, security, and safety, etc. Talking about these obstructions in detail following are the problems faced majorly:
Administrative Burden: Since the payroll is done manually it creates an undue burden and is an inefficient method as it is prone to human error. Sue to all the paperwork that is to be done it becomes baggage on the HR staff and management.
Incompatible software: This generally comes up as a problem since not all the payroll management software are compatible to each other. In such a situation when one uses multiple software for different functions which generally include employee profiles, payroll, attendance, etc. these software’s do not merge due to incompatibility. Hence, just act as a barrier increasing the workload and working hours for the HR management creating a major inconvenience for the company itself.
Compliance issues: Indian income tax is one of the most tedious and complex systems across the world. Understanding it is entirely is another level of burden and often a futile endeavor. At the same time missing out on the tax system can prove to be a grave and costly mistake in the later run for the organization.
Therefore, accurate and timely to the time scheduled statutory practices have become a need of the hour for most businesses to run efficiently without any obstruction or being questioned as a faulty system.
Safety and Security: Maintaining the secrecy of confidential employee data and cumbersome spreadsheets is a major challenge. It is a difficult task and a problem since payroll frauds can be committed in various forms which include and are not only restricted to false wages and commissions, ghost employees, or faking injuries to claim insurance.
Manual processing further increases the probability of mishandling or forgery of data and leakage of information which can create major trouble for businesses in the future. Such inconveniences generally come u when employees have access to critical data and components of the manual or the e-payroll software whichever is in use.
Organizational issues: In connection to the administrative burden, maintaining payroll, employee records, and other important data/information in an easy-to-access and efficient manner exists. This is based on heavy usage of paperwork and is termed as a non-efficient and archaic method in this age of the digital world.
There can be further many more problems that are faced in the payroll system which include employee productivity, human error, data management issue, distribution system, high time consumption, noncompliance, etc. All these payroll processing challenges can be addressed by providing outsourcing and intellectual solutions.
5 best practices for calculating payroll for small business owners
Your small business is up and running, you’ve hired a couple of people to help you, and made a profit for the first time. Congratulations! You have a great start.
Like all small business owners, you are probably still faced with a few tasks that may not necessarily be your strong point, but that need to be done, such as payroll accounting.
Of all the accounting duties you can perform – tax preparation, bookkeeping, accounts payable, and accounts receivable – payroll accounting may be the most important to your business’s livelihood. If your employees are not paid on time or paid the right amount, you will have trouble retaining them to keep your business running.
In other words, payroll is the right thing to do.
But don’t worry, you are not alone. In this article, we will provide a roadmap to help you calculate wages accurately and efficiently. Follow these guidelines so that your employees are happy that they are paid on time, and you are happy that you are not tearing your hair because of the paycheck.
Use integrated payroll software
If you have a small business, you already have more than enough for your day-to-day work. Why make life difficult for yourself by using ineffective payroll methods (such as paper ledgers and spreadsheets ) or outdated software?
There are many payroll processing options that are designed to interact with your other accounting and finance software.
By combining the strengths of your payroll software with other accounting software, you can do things like:
- Get data from your time tracking software so employees’ hours never have to be entered twice.
- Export tax information automatically when it’s time to pay your annual taxes.
- Export monthly payroll data to your business accounting software.
Many of the most popular options have strong integrations with other popular business software. For example, if you are already happy with your accounting and time attendance software, ask these vendors which payroll solutions they work best with.
Always, always do it on time
Want to see your employees riot? Delay processing your payroll for a few days because you have more pressing concerns.
No matter how big or small your company is, your employees always expect and deserve timely payment. After all, they have bills to pay and families to feed, and they need to know when they will have these funds in their bank accounts.
The good thing about using payroll software is that once you have an employee in the system and integrated with your time attendance system, you can pretty much relax and let them do their job.
Honestly, if you only have a few employees, automation might be overkill. But you can still set up reminders to get it done on time.
Know when to seek help
Payroll is not the same as learning to play the guitar. You can’t just “pretend until you do it” or learn as you go, unless you’re trying to create a lot more work for yourself in the future, or worse, trying to hit Sarbanes-Oxley.
You may be really good at brewing coffee or beer, planning weddings, or creating websites, but you’re not very good at calculating numbers, and that’s okay. You wouldn’t try to fix one of your fleet’s cars or write code if you didn’t know how to do it, and you shouldn’t try to do payroll if you don’t know what you are doing.
Know your limitations and seek help when you need it. It may cost a little more, but it will save you a lot of time in the long run.
Set up direct translation
Many people have fond memories of getting their first paycheck in a part-time job, followed by not so fond memories of how little 20 hours at $ 5.65 an hour add up to after taxes.
This meager salary becomes even more meager after you spend time and money in bank custody.
Direct deposit (transferring salaries directly into your employees’ bank accounts) is better for everyone except check printing companies. Your employees get their money faster and you don’t have to queue at the bank, you don’t have to print and distribute paper checks, and you don’t have to chop down trees to turn them into checks.
Protect your data
Security is important for all of your data, but especially for sensitive information like your employees’ personal banking information. The downside of using direct deposit is that you have access to all of your employees’ personal banking information, and you can never take this responsibility lightly.
Never leave a paper trail. This is another benefit of direct deposit, but you can’t always stop your employees from doing things like printing pay stubs. Distribute paper shredders on-site and encourage your employees to use them to handle any sensitive documents.
As an employer, you are also responsible for keeping your network safe. If you leave the virtual backdoor open and hackers infiltrate your employees’ information, you are to blame.
Another benefit of outsourcing payroll or using payroll software is that you can expect a third party to worry about data security or fix it in the event of a breach.