Note: This post has been guest authored by Saurabh Sharma, who is currently working as a Media Coordinator with Techjockey. With more than three years of experience in SEO content and the latest optimization practices, he likes to write on trending software and technology. He is a tech lover and always looks for the latest industry trends to keep the readers updated.
An Introduction to Payroll
Payroll can be defined as the management of the record of the overall payment offered by a company. Simply speaking, it is the record of the overall salary transactions. Payroll is one of the most important tasks that can affect a business both positively or negatively.
It is not just an important task but a complicated one too as it can either encourage or discourage the morale of the employees. To run a business properly, an employer has to ensure the payroll of the employees accurately and timely. Additionally, the employer should have a sound knowledge of various laws and regulations such as PT, PF and labor laws along with other critical statutory standards.
Payroll is a simple term but involves complex calculations along with various business functions. It involves functions such as pay policy and its flexible benefits, payslip components, releasing salary, depositing TDS, PF, etc., filing returns and calculating other payroll inputs.
Any casual behavior or negligence can lead to serious legal and financial consequences and can degrade the reputation of the business.
Challenges Faced During Payroll Management
This complicated process ensures that every employee is paid in a correct manner – neither less nor more. After deducting specific and appropriate payroll taxes as well as various other items, the employee gets the salary.
Here are some challenges faced during the management of Payroll:
1. Statutory Compliance: The business has to be synchronized with the statutory compliances of the country to avoid getting the company into a legal liability. It will not only risk the existence of business but also to the imposition of a high penalty for non-compliance. As for example, in India, the common statutory compliances are provisions of minimum wages, payment of overtime, PF, ESI and TDS deduction.
2. Taxation: Taxation related issues are very common in payroll management as it is difficult to include all the tax calculations accurately on a payslip. Taxation rules are very dynamic in nature and they keep on changing, so the employer needs to be updated to avoid any inconvenience or penalties.
3. Accuracy: Accuracy is one of the most important factors while maintaining payroll. It is a process in which regular updates are very important in order to attain accuracy.
The employer can focus on the business and get better results by simply investing in payroll management services.
What are Payroll Management Services?
Companies used to hire an external service provider to manage its payroll system. That is no longer necessary with the installation and operation of payroll software becoming more popular. Such software will not only help manage the payroll but also let you focus on the growth of your business.
Benefits of Payroll Management Software in Business Growth
Following are the ways in which payroll management software facilitates business growth:
- Focus on Business – The Company will be able to focus on the business properly. The amount of time that was spent on payroll management can now be gainfully used for other operations that grow the business. It may sound a useless expense, but, payroll management via payroll software is a cost-effective investment in the business.
- Statutory Compliances – As mentioned above, in the field of taxation it is very necessary to remain updated and synchronized with the state laws, rules and regulations. It is a very crucial factor and helps in avoiding any legal liability on the company. Such software keeps an eye on this subject of rules and regulations to stay updated so that the company doesn’t fall in any expensive and cumbersome legal trap.
- Accuracy and Timely Delivery – Software for payroll management ensures accuracy in maintaining payrolls within short time intervals. If employees get their paycheck on time, their morale will be high. Eventually, they will work more efficiently which will help the business to grow.
- Reduced Burden – Management of payrolls needs proper maintenance, but requires too much time if done manually. By investing some money in payroll software, the company can reduce the amount of burden from its shoulders and can use this time more effectively.
- Security – Every business is prone to some security breaches. Investing in such software will reduce the risk of these breaches, thereby ensuring safety.
- Zero or Minimal Chances of Error – Technology has its advantages and one of them can be seen in business. It will not only help the business grow but will also improve the goodwill for the organization.
According to the results of a survey, companies that use payroll software had witnessed marginal growth in their business. Moreover, these companies made more money than in the previous year.
Also, payroll software companies had experienced huge demand as they can easily reduce the labor cost in a business. In the United States, the annual growth of companies in the HR and payroll software industry was at 6.7% between 2013 and 2018, and their revenue reached 8 billion dollars in 2018.
Payroll management services can provide a wide range of benefits in order to grow the business. With the advancement of technology, it will be easier to manage payroll through payroll software.
Investments are necessary in the business, especially in cases where there is less or no margin for error. Payroll management is one such crucial case. Investment in payroll software is necessary for the proper functioning of the system as also to ease out friction in the way of growth.