TYPES OF PAYROLL SYSTEMS
OVERVIEW
The payroll system provides the medium necessary for the employer to process its payroll. As long as the payroll system satisfies the employer’s payroll needs, the latter can use whichever system it wants.
Manual
A manual payroll system should be chosen after careful deliberation. This system requires the payroll person to process the entire payroll by hand, increasing the likelihood of errors. Employers should go with a manual payroll system only if they have few employees. The upside of this system is that it’s inexpensive to implement.
Employers can buy standard timesheets from a stationary shop and have employees complete them. The employer can perform wage and tax calculations on a calculator, hand-write pay cheques/pay stubs or use a typewriter and keep hard copy payroll data in storage boxes. Still, attempting to use this system if one is not knowledgeable about payroll laws, or if the payroll is too large, can result in inaccurate paycheck and tax processing.
In-house Computerized
The in-house computerized system is a viable alternative if an employer wants to eliminate manual payroll processing. This system involves the use of payroll software, such as Sage Accounting, Humi, and QuickBooks, and Wagepoint just to name a few, that can store payroll data for recordkeeping compliance. It calculates wages and deductions based on inputted data. For instance, the payroll person would enter the employee’s filing status, work state and allowances into the payroll software. The payroll software has the federal and state withholding tables hard coded in the system and performs the calculations.
This system requires the employers to invest in, and maintain, payroll software. Depending on the complexity of the software, the payroll staff may require extensive training. If the payroll is small, a sole payroll person can handle payroll processing. But if the payroll is large, with thousands of employees, an employer would need to hire a full payroll staff, which can include payroll clerk/assistant, payroll specialist, payroll supervisor and payroll manager. This system can prove expensive for employers.
What Is Payroll Software?
A payroll system is a program used to streamline and manage employee payments. It manages and automates payments to employees, ensuring on-time paycheck delivery and compliance with local and federal regulations. Payroll software frees up human resource teams to do other tasks, such as planning and budgeting.
The payroll system developed as a result of business owners recognizing the need to track purchases, sales, and all company finances to run a successful business. As a smart, business-minded person, you know how important that is. However, tracking these kinds of finances can be time-consuming and tedious for a business of any size.
Outsourcing
Outsourcing the payroll to a payroll service provider is often a cost-effective and time-saving alternative for employers. Payroll services have payroll professionals that process clients’ payroll, including direct deposit payments, pay cheques and report processing. Employers pay a flat fee for this service, eliminating the need to pay an on-site payroll staff salaries and benefits. Furthermore, employers do not have to deal with payroll software glitches. Ultimately, outsourcing payroll gives an employer time to focus on other duties.
Many payroll service providers offer online payroll solutions, which allow employers to access to employee payroll data and payroll registers online. Furthermore, payroll services typically offer clients different methods of transmitting payroll hours for each pay period, such as via fax, by email or online.
The downside to outsourcing is that when employees have payroll concerns, immediate help might not be available. Furthermore, when a payroll service makes certain payroll tax errors, the government agencies penalize the employer, not the payroll service. Consequently, some employers hire an on-site payroll administrator, who works as a liaison for the payroll service and the employer.
Manual
A manual payroll system should be chosen after careful deliberation. This system requires the payroll person to process the entire payroll by hand, increasing the likelihood of errors. Employers should go with a manual payroll system only if they have few employees. The upside of this system is that it’s inexpensive to implement.
Employers can buy standard timesheets from a stationary shop and have employees complete them. The employer can perform wage and tax calculations on a calculator, hand-write pay cheques/pay stubs or use a typewriter and keep hard copy payroll data in storage boxes. Still, attempting to use this system if one is not knowledgeable about payroll laws, or if the payroll is too large, can result in inaccurate paycheck and tax processing.
In-house Computerized
The in-house computerized system is a viable alternative if an employer wants to eliminate manual payroll processing. This system involves the use of payroll software, such as Sage Accounting, Humi, and QuickBooks, and Wagepoint just to name a few, that can store payroll data for recordkeeping compliance. It calculates wages and deductions based on inputted data. For instance, the payroll person would enter the employee’s filing status, work state and allowances into the payroll software. The payroll software has the federal and state withholding tables hard coded in the system and performs the calculations.
This system requires the employers to invest in, and maintain, payroll software. Depending on the complexity of the software, the payroll staff may require extensive training. If the payroll is small, a sole payroll person can handle payroll processing. But if the payroll is large, with thousands of employees, an employer would need to hire a full payroll staff, which can include payroll clerk/assistant, payroll specialist, payroll supervisor and payroll manager. This system can prove expensive for employers.
What Is Payroll Software?
A payroll system is a program used to streamline and manage employee payments. It manages and automates payments to employees, ensuring on-time paycheck delivery and compliance with local and federal regulations. Payroll software frees up human resource teams to do other tasks, such as planning and budgeting.
The payroll system developed as a result of business owners recognizing the need to track purchases, sales, and all company finances to run a successful business. As a smart, business-minded person, you know how important that is. However, tracking these kinds of finances can be time-consuming and tedious for a business of any size.
Outsourcing
Outsourcing the payroll to a payroll service provider is often a cost-effective and time-saving alternative for employers. Payroll services have payroll professionals that process clients’ payroll, including direct deposit payments, pay cheques and report processing. Employers pay a flat fee for this service, eliminating the need to pay an on-site payroll staff salaries and benefits. Furthermore, employers do not have to deal with payroll software glitches. Ultimately, outsourcing payroll gives an employer time to focus on other duties.
Many payroll service providers offer online payroll solutions, which allow employers to access to employee payroll data and payroll registers online. Furthermore, payroll services typically offer clients different methods of transmitting payroll hours for each pay period, such as via fax, by email or online.
The downside to outsourcing is that when employees have payroll concerns, immediate help might not be available. Furthermore, when a payroll service makes certain payroll tax errors, the government agencies penalize the employer, not the payroll service. Consequently, some employers hire an on-site payroll administrator, who works as a liaison for the payroll service and the employer.
Wrap Up
Regardless of the size of a business or what the payroll needs are, it is likely that a payroll system can help. There are plenty of payroll system options to choose from. The tricky part is picking the right one. Some of the most important considerations will be the size of a business and budget.
But there will certainly be other considerations a business owners would not want to compromise on that are specific to it. As a rule, they should compile a list of what they need from a payroll system and keep it handy when shopping around so they know which system checks all the boxes — and be aware of which ones check too many extras. Be it manual-spreadsheet, software or outsourcing.
But there will certainly be other considerations a business owners would not want to compromise on that are specific to it. As a rule, they should compile a list of what they need from a payroll system and keep it handy when shopping around so they know which system checks all the boxes — and be aware of which ones check too many extras. Be it manual-spreadsheet, software or outsourcing.
Manual Payroll Processing
Payroll processing requires careful handling to ensure accurate paycheques and payroll tax compliance. Employers may use an in-house computerized system in which the payroll software does the calculations, or they may outsource the task to a payroll service provider to handle the calculations. They can also use the manual system, which requires even more caution.
Definition
Manual processing system involves making manual entries in traditional payroll ledgers, spreadsheets, and a calculator, instead of state-of-the-art computerized aids. Used by firms in the manufacturing and construction industries to calculate pay for onsite contractual labor or very small businesses where payments are made on a daily/weekly basis. The process, however, is time-consuming, tedious, risky, and error prone. Even during the age of tax cuts and a solid economy this is nothing to write home about.
In addition, manual payroll calculation means that the payroll is processed by hand. It does not require an investment in payroll software. Such software has rates embedded in the programming, which eliminates manual calculation of payroll taxes. Furthermore, the software calculates wages and stores employee payroll data. With manual calculation, payroll clerks/specialists determine all wages and required deductions manually. If they are not careful, they can make errors.
Requirements
Typically, all that is required to perform manual payroll processing is a calculator, payroll ledger, blank cheques, a computer, spreadsheet software and stationery. The employees who handle the payroll must have sufficient understanding of payroll laws to efficiently perform the calculations. For example, they must stay abreast of the Federal and provincial labor standard wage and payroll tax laws. If these individuals do not understand these laws well enough, the result can be erroneous paycheques and noncompliance to payroll laws, which lead to fees and penalties.
Types of Calculations
There are many different types of manual payroll calculation. The payroll specialists manually compute hourly workers’ time, which includes computing time-keeping data. They manually calculate salaries, which includes dividing the annual pay in the number of pay periods in the year. Additionally, they manually compute supplemental pay, such as overtime pay, severance and retroactive pay due to pay increases. Furthermore, they also manually process new hires and terminations and calculates payroll taxes. The latter includes determining the withholding amount for federal income tax, provincial income tax and other mandatory and voluntary deductions. Th voluntary deductions may include retirement, medical, life and dental benefits, as well as union dues and donations.
Tax Resources
When manually calculating income tax, the payroll specialists must always consult the federal and provincial (Employers Tax Guides), which instruct employers on how to withhold, report and pay federal and provincial payroll taxes. These guides contain the tax tables for both governments and needed to manually calculate the employees’ withholding amounts. Additionally, they consult the employees’ TD1 and TP1 forms to determine. both federal and provincial income taxes.
Important
Employer should perform manual payroll calculation only if their payroll is small, such as fewer than 10 employees, due to the propensity for errors in the process.
A manual payroll serves a small business with a few employees. To meet the company’s needs, it can be modified and tailored. In contrast to an automated system, it might be more adaptable. Due to the lower expenditure needed, it is also simpler to obtain.
Definition
Manual processing system involves making manual entries in traditional payroll ledgers, spreadsheets, and a calculator, instead of state-of-the-art computerized aids. Used by firms in the manufacturing and construction industries to calculate pay for onsite contractual labor or very small businesses where payments are made on a daily/weekly basis. The process, however, is time-consuming, tedious, risky, and error prone. Even during the age of tax cuts and a solid economy this is nothing to write home about.
In addition, manual payroll calculation means that the payroll is processed by hand. It does not require an investment in payroll software. Such software has rates embedded in the programming, which eliminates manual calculation of payroll taxes. Furthermore, the software calculates wages and stores employee payroll data. With manual calculation, payroll clerks/specialists determine all wages and required deductions manually. If they are not careful, they can make errors.
Requirements
Typically, all that is required to perform manual payroll processing is a calculator, payroll ledger, blank cheques, a computer, spreadsheet software and stationery. The employees who handle the payroll must have sufficient understanding of payroll laws to efficiently perform the calculations. For example, they must stay abreast of the Federal and provincial labor standard wage and payroll tax laws. If these individuals do not understand these laws well enough, the result can be erroneous paycheques and noncompliance to payroll laws, which lead to fees and penalties.
Types of Calculations
There are many different types of manual payroll calculation. The payroll specialists manually compute hourly workers’ time, which includes computing time-keeping data. They manually calculate salaries, which includes dividing the annual pay in the number of pay periods in the year. Additionally, they manually compute supplemental pay, such as overtime pay, severance and retroactive pay due to pay increases. Furthermore, they also manually process new hires and terminations and calculates payroll taxes. The latter includes determining the withholding amount for federal income tax, provincial income tax and other mandatory and voluntary deductions. Th voluntary deductions may include retirement, medical, life and dental benefits, as well as union dues and donations.
Tax Resources
When manually calculating income tax, the payroll specialists must always consult the federal and provincial (Employers Tax Guides), which instruct employers on how to withhold, report and pay federal and provincial payroll taxes. These guides contain the tax tables for both governments and needed to manually calculate the employees’ withholding amounts. Additionally, they consult the employees’ TD1 and TP1 forms to determine. both federal and provincial income taxes.
Important
Employer should perform manual payroll calculation only if their payroll is small, such as fewer than 10 employees, due to the propensity for errors in the process.
A manual payroll serves a small business with a few employees. To meet the company’s needs, it can be modified and tailored. In contrast to an automated system, it might be more adaptable. Due to the lower expenditure needed, it is also simpler to obtain.
Manual vs Automated Payroll System
Every organization needs to manage the accounts and keep track of employee attendance, which is primarily the responsibility of the human resource department. The management does this by correctly calculating the payroll and complying with the taxing authority. However, it affects employee morale and the company’s financial soundness. Hence, payroll management must be carried out in a uniform and unified manner by every business.
On the market today, manual payroll processing is still used by a majority of businesses. The two primary responsibilities of payroll management services are as follows:
Thus, the business determines the wages it pays its employees. The standard payroll checklist calls for companies to keep the following aggregated documents on hand as well:
Yet the question now has to be answered which payroll is superior in Manual Payroll vs Automated Payroll System
What is a Manual payroll system?
Manual payroll refers to calculating and preparing employees' paycheques without the help of software or a payroll specialist. Most business owners should let software or a professional handle the number crunching; however, some small business owners do payroll by hand to save money.
A business might be a suitable candidate for manually processing payroll if your company only has a few employees and you are well-versed in payroll tax regulations. However, you’re better off using software in any other situation.
On the market today, manual payroll processing is still used by a majority of businesses. The two primary responsibilities of payroll management services are as follows:
- The process of preparing payroll inputs
- Generating payroll reports
Thus, the business determines the wages it pays its employees. The standard payroll checklist calls for companies to keep the following aggregated documents on hand as well:
- Current employee database
- Complete new hire paperwork
- Monitoring upcoming employee departures
- Keeping track of sick days and vacation schedules
- Salary adjustments and other modifications
- Info on authorized absences and overtime
Yet the question now has to be answered which payroll is superior in Manual Payroll vs Automated Payroll System
What is a Manual payroll system?
Manual payroll refers to calculating and preparing employees' paycheques without the help of software or a payroll specialist. Most business owners should let software or a professional handle the number crunching; however, some small business owners do payroll by hand to save money.
A business might be a suitable candidate for manually processing payroll if your company only has a few employees and you are well-versed in payroll tax regulations. However, you’re better off using software in any other situation.
Pros and Cons of a Manual Payroll System
Pros of Manual Payroll System
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Cons of Manual Payroll System
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What is Automated Payroll System?
The former takes more time when comparing manual payroll processing to automated payroll. If you also consider that you will deal with compliance, then your HR Employees will have a sizable task at hand each pay period.
As a result, paying employees involves an automated payroll system, which entails calculating earnings and withholdings for taxes and employee benefits. In addition, the payroll may also include business documents about the distribution of paychecks and employee wages. Although crucial, this process can be expensive and time-consuming. Here, automation has a significant impact.
By using software to streamline payroll processing, payroll automation decreases the amount of human input. Calculating tax withholdings, submitting taxes, and processing direct deposits are all made more accessible by payroll automation. These solutions for finance teams can help save time and money, particularly during the pay period.
As a result, paying employees involves an automated payroll system, which entails calculating earnings and withholdings for taxes and employee benefits. In addition, the payroll may also include business documents about the distribution of paychecks and employee wages. Although crucial, this process can be expensive and time-consuming. Here, automation has a significant impact.
By using software to streamline payroll processing, payroll automation decreases the amount of human input. Calculating tax withholdings, submitting taxes, and processing direct deposits are all made more accessible by payroll automation. These solutions for finance teams can help save time and money, particularly during the pay period.
Pros & Cons - Automated Payroll System
Pros of Automated Payroll System
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Cons of Automated Payroll System
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Manual vs Automated Payroll System
While comparing manual payroll vs automated payroll system, Using an automated payroll system, then, would result in financial savings in the future. Moreover, these savings in time and money result from accurate automated computation instead of errors in human payroll accounting.
Here are some of the key differences of manual payroll vs automated payroll system :
Here are some of the key differences of manual payroll vs automated payroll system :
Key Differences Between Both Systems
Overall, in the key differences of manual payroll vs automated payroll system, an automated payroll system can offer significant advantages over a manual system, including increased efficiency, accuracy, scalability, and security. While an automated system may require an initial investment in software and hardware, the long-term cost savings and benefits can outweigh the initial costs.
Comparison of Manual and Automated Payroll System
- While comparing manual payroll vs automated payroll system, the aspect of speed is where there is a significant difference. Accounting computer software automatically processes all the data and produces results. Few chances of inaccuracy and quick and reliable results are provided.
- Cost-wise comparison of manual payroll vs automated payroll system, the human resource management system’s manual accounting is less expensive. However, you’ll need a calculator, paper, and a pen or pencil. In addition to other costs like training, program upkeep, etc., automated payroll management has a set cost.
- Manual systems are particularly insecure in terms of security. This is because other persons could quickly glance at the documents and abuse this knowledge. Yet with automation, all the data stays secured inside the program. As a result, you can safeguard employee information.
- In comparison of manual payroll vs automated payroll system, the manual payroll data is particularly challenging to retain a backup of. Automation allows you to save every aspect of a transaction and maintain a backup, unlike extensive paperwork that can be lost due to improper management.
Conclusion
In conclusion, it is obvious who wins when comparing manual payroll vs automated payroll system. An automated payroll system performs better than a human in several categories, including standardization, accuracy, reliability, usability, and accessibility.
OUTSOURCING PAYROLL OPERATIONS
Individual starting out in business, might not have realized the role Human Resources and payroll specialists have to play in their businesses’ daily operations – especially for their team’s monthly salary.
This is doubly challenging to Human Resources Department as your business grows, having to search for, hire, and manage more employees as time goes on. With small percentage of small businesses still managing their finances and accounting manually, this takes longer and is prone to human error. Moreover, they work on several operations and strategies at a time alongside leadership to support people, culture, and business growth.
This is doubly challenging to Human Resources Department as your business grows, having to search for, hire, and manage more employees as time goes on. With small percentage of small businesses still managing their finances and accounting manually, this takes longer and is prone to human error. Moreover, they work on several operations and strategies at a time alongside leadership to support people, culture, and business growth.
What is Payroll Outsourcing?
Payroll outsourcing is hiring a third-party service provider to manage accounting for one’s staff’s salary and benefits. It is an option available to small and large businesses, particularly when they have experienced challenges in managing it on their own.
Generally, individuals focus in starting a business is the solutions they want to offer their customers. They might have even started out as self-employed entrepreneurs. Managing a team and their salary would have been the least of your worries, so it is understandable that they would not be familiar with how to do payroll.
Therefore, they are not expected to become an overnight expert on the payroll management system. Over time, they can build up a team dedicated to your Human Resources (HR) and finance operations, or partner with a reliable payroll outsourcing agency. with to assist your business.
Generally, individuals focus in starting a business is the solutions they want to offer their customers. They might have even started out as self-employed entrepreneurs. Managing a team and their salary would have been the least of your worries, so it is understandable that they would not be familiar with how to do payroll.
Therefore, they are not expected to become an overnight expert on the payroll management system. Over time, they can build up a team dedicated to your Human Resources (HR) and finance operations, or partner with a reliable payroll outsourcing agency. with to assist your business.
The Benefits of Outsourcing Payroll
As mentioned above, with a minor percentage of small businesses manually doing their books, they are inevitably susceptible to human error.
On the other side of the coin, many small businesses outsource their payroll processes. This shows that a good number of organizations have seen and experienced the advantages of outsourcing their salary operations. Even large corporations can benefit from third-party payroll services as this can help decrease their overhead costs.
Why should a Company Outsource Payroll Processes?
Benefit #1: Outsourcing Payroll Saves Time
It takes a lot of moving parts to support a business as it grows. It’s impressive when leaders and managers have the proper delegation skills to keep track of different teams and projects at a time, it isn’t feasible for everyone.
Partnering with a payroll service provider takes some of the weight off your shoulders. It saves you time and effort formulating plans of action to improve operations, mostly because HR agencies would have established process and productivity tools for a more straightforward approach.
This is also where automation applications come in. While these also need setting up at first, once you’ve arranged all the necessary settings and cataloged the essential details, it’s smoother sailing than doing it manually.
Benefit #2: Comprehensive Payroll Services
The best payroll services have a comprehensive list of features and tools. This usually comprises timesheets, attendance, leave filing, recordkeeping, salary and tax computation, and employee management all in one platform.
The best feature of all is the convenience of being able to use the platform from any device. Once it’s time to claim a payout, employees can select their preferred method.
This can also save you time since you won’t have to switch between multiple applications to do one task. Of course, working with a payroll service provider means not having to do it yourself at all.
Benefit #3: Payroll Outsourcing is Safe and Secure
While setting tools up and implementing their use can take time, automating tasks decrease the chances for mistakes down the road. Moreover, any reliable application should have established security measures and privacy policies for its users.
That said, it’s vital to select the provider with the most ideal protection features for your team’s information. This is also encouraging for your staff because they can freely use and access the payroll system as much as they need, and they’ll have a secure transaction each time.
Benefit #4: Affordable Pricing for Payroll Outsourcing
With all these functions available in payroll outsourcing platforms, being affordable is a considerable advantage over searching for, hiring, training, and establishing processes internally. Of course, being able to accomplish all these within your company is a notable accomplishment, lowering costs is also a priority for your business.
Find the ideal payroll outsourcing tool to match your needs with all the features you require within the budget you’ve allotted.
On the other side of the coin, many small businesses outsource their payroll processes. This shows that a good number of organizations have seen and experienced the advantages of outsourcing their salary operations. Even large corporations can benefit from third-party payroll services as this can help decrease their overhead costs.
Why should a Company Outsource Payroll Processes?
Benefit #1: Outsourcing Payroll Saves Time
It takes a lot of moving parts to support a business as it grows. It’s impressive when leaders and managers have the proper delegation skills to keep track of different teams and projects at a time, it isn’t feasible for everyone.
Partnering with a payroll service provider takes some of the weight off your shoulders. It saves you time and effort formulating plans of action to improve operations, mostly because HR agencies would have established process and productivity tools for a more straightforward approach.
This is also where automation applications come in. While these also need setting up at first, once you’ve arranged all the necessary settings and cataloged the essential details, it’s smoother sailing than doing it manually.
Benefit #2: Comprehensive Payroll Services
The best payroll services have a comprehensive list of features and tools. This usually comprises timesheets, attendance, leave filing, recordkeeping, salary and tax computation, and employee management all in one platform.
The best feature of all is the convenience of being able to use the platform from any device. Once it’s time to claim a payout, employees can select their preferred method.
This can also save you time since you won’t have to switch between multiple applications to do one task. Of course, working with a payroll service provider means not having to do it yourself at all.
Benefit #3: Payroll Outsourcing is Safe and Secure
While setting tools up and implementing their use can take time, automating tasks decrease the chances for mistakes down the road. Moreover, any reliable application should have established security measures and privacy policies for its users.
That said, it’s vital to select the provider with the most ideal protection features for your team’s information. This is also encouraging for your staff because they can freely use and access the payroll system as much as they need, and they’ll have a secure transaction each time.
Benefit #4: Affordable Pricing for Payroll Outsourcing
With all these functions available in payroll outsourcing platforms, being affordable is a considerable advantage over searching for, hiring, training, and establishing processes internally. Of course, being able to accomplish all these within your company is a notable accomplishment, lowering costs is also a priority for your business.
Find the ideal payroll outsourcing tool to match your needs with all the features you require within the budget you’ve allotted.
Things to Consider When You Outsource Payroll
So, what are the things a company should look out for when browsing for the appropriate payroll service provider? Below are some points to keep in mind on how to choose a provider:
- Similar to when hiring a new team member, determine if the potential payroll outsourcing meets its requirements, and vice versa.
- Find feedback from their previous clients and review their track record. These can also confirm if the platform has the features it is looking for.
- See if there’s a free trial period for the platform and evaluate how well the team interacts with it in the time available. If it’s amenable to the overall work process, consider permanently integrating it into your routine.
How Does Payroll Outsourcing Work?
Let’s discuss the business side of things: How do you integrate an outsourced payroll service into your company workflow? What basic functions is the average payroll platform capable of? What features should you look out for in your search for the right fit?
Learn more about how payroll outsourcing works to discover how you can shift your processes to include it. Payroll service providers typically offer the following tools on their platform:
Feature #1: Integrated Timekeeping and Attendance
An integral part of the outsourced payroll platforms is the timekeeping feature, which is what makes automating tasks possible. Employees can also schedule their leave requests from the application, which simplifies the process of emailing specific managers and them manually checking an Excel sheet of who would be on leave.
From the main page, you would typically see a time recorder and buttons to time in or out, a calendar to see which days you’ve attended work or taken off, and how many PTOs you have left. This is a quick and easy way to see an overview of your work attendance.
Feature #2: Automated Accounting
As the main feature you’re looking to use on a payroll service, make sure that you’re comfortable with the look and feel of the platform.
Thanks to your attendance details, the outsourced platform can work as intended and automate payout, tax, and other benefits computations. This streamlines multiple tasks and saves your HR and finance department a lot of time processing each employee’s salary for the month – a benefit that both small and large businesses can enjoy.
Feature #3: Cloud-Based Access for Employees
An excellent feature for teams working from home, more so for companies with an international workforce. An online platform that can be accessed whether from the office or on-the-go makes the process faster and more seamless for everyone. Managers can access employee attendance records. Employees can update their information and access it as needed.
Feature #4: All-Inclusive Client Support
To stand out among competitors, service providers will integrate as many handy features as possible centered on automating or assisting on minor tasks.
Many platforms make your government dues and fees easier to track and manage thanks to the automated computation from payroll platforms. Receive email notifications of payment amounts and deadline reminders, so you won’t incur interest due to late payments. There are also providers who offer tax and payroll report assistance, benefits claims, and unemployment claims.
Payroll outsourcing platforms also offer 24/7 support for queries and troubleshooting concerns through voice and chat support. This means they can serve clients from different parts of the world and provide prompt assistance.
Learn more about how payroll outsourcing works to discover how you can shift your processes to include it. Payroll service providers typically offer the following tools on their platform:
Feature #1: Integrated Timekeeping and Attendance
An integral part of the outsourced payroll platforms is the timekeeping feature, which is what makes automating tasks possible. Employees can also schedule their leave requests from the application, which simplifies the process of emailing specific managers and them manually checking an Excel sheet of who would be on leave.
From the main page, you would typically see a time recorder and buttons to time in or out, a calendar to see which days you’ve attended work or taken off, and how many PTOs you have left. This is a quick and easy way to see an overview of your work attendance.
Feature #2: Automated Accounting
As the main feature you’re looking to use on a payroll service, make sure that you’re comfortable with the look and feel of the platform.
Thanks to your attendance details, the outsourced platform can work as intended and automate payout, tax, and other benefits computations. This streamlines multiple tasks and saves your HR and finance department a lot of time processing each employee’s salary for the month – a benefit that both small and large businesses can enjoy.
Feature #3: Cloud-Based Access for Employees
An excellent feature for teams working from home, more so for companies with an international workforce. An online platform that can be accessed whether from the office or on-the-go makes the process faster and more seamless for everyone. Managers can access employee attendance records. Employees can update their information and access it as needed.
Feature #4: All-Inclusive Client Support
To stand out among competitors, service providers will integrate as many handy features as possible centered on automating or assisting on minor tasks.
Many platforms make your government dues and fees easier to track and manage thanks to the automated computation from payroll platforms. Receive email notifications of payment amounts and deadline reminders, so you won’t incur interest due to late payments. There are also providers who offer tax and payroll report assistance, benefits claims, and unemployment claims.
Payroll outsourcing platforms also offer 24/7 support for queries and troubleshooting concerns through voice and chat support. This means they can serve clients from different parts of the world and provide prompt assistance.
Recap
Outsourcing the payroll process is not a last resort. Though businesses can opt to partner with them following challenges in managing the Human Resources and accounting process by themselves, keep in mind that the nature of business is to focus on its strengths. Networking and collaborating with industry experts can help managers learn new approaches and techniques, similar to finding a mentor and gaining an inside look into their expertise.
To summarize, what makes partnering with a payroll outsourcing service a benefit to your company?
To summarize, what makes partnering with a payroll outsourcing service a benefit to your company?
- Simplify complex payroll processes – Providers have integrated all the useful tools to help polish your workflow.
- Automation of most payroll tasks – The essential functions to your process can be streamlined through automation programs and incorporating timekeeping, attendance, and leave requests onto one platform.
- Partner with the payroll professionals – Learn tried and tested techniques from the experts, or better yet, establish a partnership which benefits both parties as you focus on how to develop your businesses accordingly.
SOFTWARE IS BETTER THAN SPREADSHEETS FOR PAYROLL
Spreadsheets are fantastic tools when used for the right purpose. However, businesses face problems when they extend the use of spreadsheets far beyond where they are helpful, such as completing the entire payroll process. Payroll is not just computing pay cheques, and spreadsheets are not the best tool for the process.
While spreadsheets appear familiar and easy, using them well for payroll needs a lot of expertise. Management needs to hire or retain employees who understand their payroll structure and are good with advanced concepts like pivot tables, concatenate functions, split fields, and v-lookup. This strategy leaves management dependent on their staff’s knowledge of the interdependencies within the system, and compliance with processes, to keep things running smoothly. Even with all their expertise, management may still find their payroll staff spending all night long to get their computations right. Payroll software, on the other hand, is well-suited for such tasks.
Intuitively designed systems are easy to understand, easy for payroll staff to use effectively regardless of their level of experience, and able to handle all of their calculations. They can automate most of the mundane tasks associated with payroll for a much more efficient process.
Centralized Data Management
One crucial aspect of payroll software is the ability to consolidate employees’ data in one place. Companies’ employees’ personal records, salary revision history, and tax declaration details are presented to management in one place. This allows the payroll administrator to make changes to the records without having to look around for information.
Payroll software can classify and maintain employee records effortlessly, but spreadsheets cannot. With spreadsheets, management can still manage employee records, but they have to maintain multiple spreadsheets for individual purposes like employee transfer and salary structure, plus a master spreadsheet to populate the subject-specific sheets. If employers want to get a consolidated view of all of their employees, they will have to build custom reports and assemble an awkward collection of individual charts.
Accuracy In Computation
With payroll software, accuracy is built in. It is easy to factor in earnings, deductions, one-time bonuses, and other ad hoc inputs. For example, consider the salary revision process. Not all employees get the same pay percentage increase, and the revised amount is distributed across multiple earning components in each employee’s pay slip. Payroll software is designed to analyze all these interdependent factors in seconds and calculate salaries accurately for all the employees.
Even though spreadsheets are strong with numbers, data in them can be accidentally altered due to simple formatting issues. Preset formulas can help management calculate pay, but they will need periodic audits by experts in their organization to ensure their computations are accurate. This makes for a daunting process, even if management have only one employee in their payroll.
Automatic Compliance
Payroll software brings accuracy to tax calculation and ensures that businesses stay on a legal footing. The biggest advantage of software is that it is easy to accommodate changes in the tax rates or laws. Dedicated payroll software automatically calculates the tax liabilities and generates structured tax reports, so companies can stay well prepared for the tax season. By scheduling their tax reports, they can also automate the internal audit process by making sure their auditors receive these reports on time.
Spreadsheets are not automated to be tax compliant. Everything from calculating tax liabilities to preparing data for tax reports for monthly, quarterly, or annual returns filing must be done manually.
Digitized Post-Payroll Activities
Everyone who works in the payroll department will agree, that there is more to payroll processing than merely paying employees every month. Post-payroll activities like distributing salaries online, sharing pay slips, and accounting for payroll costs are all automated through payroll software.
With spreadsheets, once management have gone through the struggle of calculating payroll, the post-payroll activities still must be completed manually. Distribution of pay slips, paying employee salaries, and accounting are all time-consuming manual processes that have to be repeated every month.
Classified Access Controls
Payroll data is very sensitive. It cannot be exposed to employees of all levels. Payroll software comes with access controls that will help management create multiple roles with appropriate access levels, so employees only see data that they are permitted to see. It also facilitates multi-team coordination with personalized invitations for each department’s roles.
When companies try to replicate this through spreadsheets, things get complicated. There are no sophisticated role-based access controls, which leaves payroll administrators making multiple copies of the same spreadsheet to share with different recipients. After they have been shared, they all must be clubbed together once again to achieve a consolidated view. It is neither efficient nor secure.
Effortlessly Scalable
Payroll software can help companies accommodate a growing number of employees and even expanding to multiple work locations without losing productivity or risking non-compliance with government labour standards. Whether a company has one employee or hundreds in its payroll, it is all the same with payroll software because the underlying logic does not change.
For spreadsheets, every time the employee count increases, or a new work location is added, a new record has to be added to the right spreadsheet. The more additions management make, the more management risk cluttering up their records with duplicate entries. This makes payroll not only time-consuming and cumbersome, but also risky and error prone.
Easy To Integrate
The biggest advantage of payroll software is that it can be easily integrated with other systems. Payroll staff and HRs dread the task of keying in the same information in multiple spreadsheets or systems. Payroll software that’s tightly integrated with HR and accounting platforms ensures that employee data flows seamlessly between the HR and payroll systems, and the payroll journal entries get posted automatically. It eliminates duplicate data entry and ensures accuracy.
While management can build integrations for spreadsheets, they are not as straightforward as integrations between pieces of dedicated software. Spreadsheets are dependent on intermediary applications to run integrations. As management add more integrations, this can quickly turn into a nightmare. Suddenly their payroll data has to pass through multiple spreadsheets and intermediary data sources just to be brought together for calculating payroll.
The Way Forward
Payroll entails a lot more than just calculating paychecks and paying employees. Depending upon spreadsheets to complete the entire process of payroll leaves
While spreadsheets appear familiar and easy, using them well for payroll needs a lot of expertise. Management needs to hire or retain employees who understand their payroll structure and are good with advanced concepts like pivot tables, concatenate functions, split fields, and v-lookup. This strategy leaves management dependent on their staff’s knowledge of the interdependencies within the system, and compliance with processes, to keep things running smoothly. Even with all their expertise, management may still find their payroll staff spending all night long to get their computations right. Payroll software, on the other hand, is well-suited for such tasks.
Intuitively designed systems are easy to understand, easy for payroll staff to use effectively regardless of their level of experience, and able to handle all of their calculations. They can automate most of the mundane tasks associated with payroll for a much more efficient process.
Centralized Data Management
One crucial aspect of payroll software is the ability to consolidate employees’ data in one place. Companies’ employees’ personal records, salary revision history, and tax declaration details are presented to management in one place. This allows the payroll administrator to make changes to the records without having to look around for information.
Payroll software can classify and maintain employee records effortlessly, but spreadsheets cannot. With spreadsheets, management can still manage employee records, but they have to maintain multiple spreadsheets for individual purposes like employee transfer and salary structure, plus a master spreadsheet to populate the subject-specific sheets. If employers want to get a consolidated view of all of their employees, they will have to build custom reports and assemble an awkward collection of individual charts.
Accuracy In Computation
With payroll software, accuracy is built in. It is easy to factor in earnings, deductions, one-time bonuses, and other ad hoc inputs. For example, consider the salary revision process. Not all employees get the same pay percentage increase, and the revised amount is distributed across multiple earning components in each employee’s pay slip. Payroll software is designed to analyze all these interdependent factors in seconds and calculate salaries accurately for all the employees.
Even though spreadsheets are strong with numbers, data in them can be accidentally altered due to simple formatting issues. Preset formulas can help management calculate pay, but they will need periodic audits by experts in their organization to ensure their computations are accurate. This makes for a daunting process, even if management have only one employee in their payroll.
Automatic Compliance
Payroll software brings accuracy to tax calculation and ensures that businesses stay on a legal footing. The biggest advantage of software is that it is easy to accommodate changes in the tax rates or laws. Dedicated payroll software automatically calculates the tax liabilities and generates structured tax reports, so companies can stay well prepared for the tax season. By scheduling their tax reports, they can also automate the internal audit process by making sure their auditors receive these reports on time.
Spreadsheets are not automated to be tax compliant. Everything from calculating tax liabilities to preparing data for tax reports for monthly, quarterly, or annual returns filing must be done manually.
Digitized Post-Payroll Activities
Everyone who works in the payroll department will agree, that there is more to payroll processing than merely paying employees every month. Post-payroll activities like distributing salaries online, sharing pay slips, and accounting for payroll costs are all automated through payroll software.
With spreadsheets, once management have gone through the struggle of calculating payroll, the post-payroll activities still must be completed manually. Distribution of pay slips, paying employee salaries, and accounting are all time-consuming manual processes that have to be repeated every month.
Classified Access Controls
Payroll data is very sensitive. It cannot be exposed to employees of all levels. Payroll software comes with access controls that will help management create multiple roles with appropriate access levels, so employees only see data that they are permitted to see. It also facilitates multi-team coordination with personalized invitations for each department’s roles.
When companies try to replicate this through spreadsheets, things get complicated. There are no sophisticated role-based access controls, which leaves payroll administrators making multiple copies of the same spreadsheet to share with different recipients. After they have been shared, they all must be clubbed together once again to achieve a consolidated view. It is neither efficient nor secure.
Effortlessly Scalable
Payroll software can help companies accommodate a growing number of employees and even expanding to multiple work locations without losing productivity or risking non-compliance with government labour standards. Whether a company has one employee or hundreds in its payroll, it is all the same with payroll software because the underlying logic does not change.
For spreadsheets, every time the employee count increases, or a new work location is added, a new record has to be added to the right spreadsheet. The more additions management make, the more management risk cluttering up their records with duplicate entries. This makes payroll not only time-consuming and cumbersome, but also risky and error prone.
Easy To Integrate
The biggest advantage of payroll software is that it can be easily integrated with other systems. Payroll staff and HRs dread the task of keying in the same information in multiple spreadsheets or systems. Payroll software that’s tightly integrated with HR and accounting platforms ensures that employee data flows seamlessly between the HR and payroll systems, and the payroll journal entries get posted automatically. It eliminates duplicate data entry and ensures accuracy.
While management can build integrations for spreadsheets, they are not as straightforward as integrations between pieces of dedicated software. Spreadsheets are dependent on intermediary applications to run integrations. As management add more integrations, this can quickly turn into a nightmare. Suddenly their payroll data has to pass through multiple spreadsheets and intermediary data sources just to be brought together for calculating payroll.
The Way Forward
Payroll entails a lot more than just calculating paychecks and paying employees. Depending upon spreadsheets to complete the entire process of payroll leaves
Users Of Financial Information & Their Questions
Finance
Is there enough cash to pay the bills? |
Human Resources
How many employees can we afford to hire this year? |
Employees
Will we be paid our salaries and bonuses on time? |
Production
Which product line is the most profitable? |
Marketing
How are we appealing to current customers? |
Research & Development
What level of revenues is necessary to show net income? |
A Case For A Computerized Payroll System
When operating a successful business, owners and managers must place strict emphasis on payroll management to ensure employees are being paid accurately and on time. Previously, all payrolls used to be calculated manually, minus any help from the computer.
Accountants were required to keep journals by the dozens, noting down every single performance fluctuation, leave, deduction, and bonuses. This proved to be quite hectic, requiring professional accountants to hire their own assistants. However, even with two heads combined or an entire department, managing payroll proved to be a tough task for many years. Many businesses have reported losses, relating to simple accounting errors during payroll calculations and management. Even though these professionals invested a lot of time and energy into keeping track of taxes, sick leaves, hourly remunerations, monthly salaries, and employee data, numerous errors could be noticed. Additionally, businesses would be required to have a complete separate filing room with records of each person employed, which meant that useful space was being utilized just to store huge boxes of documents. This act of managing payroll proves to be quite strenuous and time-consuming, not to mention obsolete. Nowadays, things are far simpler than they used to be. Thanks to advancements in technology and innovations, managing payroll has become easier and better. Numerous software providers are offering businesses complete automated payroll systems that can save accountants, Human Resources departments, and owners from complex and tedious payroll management tasks. |
Instead of keeping dozens of files and spending endless hours calculating and double-checking, you have a payroll system that automates each process and does all the nasty work. Therefore, manual versus computerized payroll system really bares no comparison.
A manual payroll means that companies will be required to hire a team of professionals who will do every accounting and payroll task by hand. On the other hand, a computerized one will be operating automatically to keep track of employee performance, attendance, and bonus data. With a payroll system, all your punches and swipes can be directly stored on the system. It can even separate regular work hours from overtime, calculate different numerations, and deduct taxes. This leaves no room for error, which cannot be said the same for manual payroll system, which is prone to miscalculations and mistakes. From basic documentation of each employee’s performance, attendance, pay, to monthly deductions, these systems save lots of time and money. A computerized payroll system can even generate annual/quarterly wage reports, tax reports, deduction reports, payroll reports, direct deposit options, and paycheck processing. Payroll systems even make it easier to organize essential payroll information. All companies’ records can be accessed and organized easily, and mangers do not have to deal with the piles of folders and papers to find what you are looking for. One of the best things about using Payroll Systems is that there is no need for businesses to buy expensive hardware. This can prove to be of great use for small organizations that want to grow and take advantage of the same features large enterprises use. |