Payroll management is one of the most challenging areas of business operations. Aside from consuming so much time when computing taxation, benefits and compensation, payroll complexities also come with errors and nuances, especially when manually accomplished. Businesses should make sure that employee salaries and benefits are paid correctly and on time especially
In order to manage payroll efficiently, read these few things business owners should start doing.
Why Should You Manage Your Payroll
Managing your payroll efficiently can help reduce your costs and streamline all other processes under your accounting department. Disappointment among employees usually comes when payment is late and inaccurate or reimbursements are not made on time. Payroll management also:
- Helps pay employees correctly - An efficient payroll system will prevent you from getting complaints for wrong reimbursements and salary computations. When employees receive the wrong payment, it may result in dissatisfaction and underperformance.
- Saves time and increases productivity - Managing your payroll properly especially when youve outsourced it, can help save time and productivity. If employee payments are done right, they are more inspired to work and be productive.
- Efficient reporting - An efficient payroll system allows you to generate accurate reports for taxation. It will also help you keep track of your finances for better financial decisions.
Questions to Ask When Managing Payroll
Payroll management entails a lot of considerations. Before deciding whether to outsource this aspect of the business or not, here are a few questions you need to ask:
What resources are required in payroll management?
Time and staff are the two most important resources every business owner should have. Enough time and the right number of people are important to administer the computation and distribution of employee compensation.
What payment method will be used when disbursing salaries and benefits?
Choosing the right payment method that best suits the need of employees is essential. Most payroll software allows for self-service which is commonly preferred by employees.
What other services should come with the payroll system?
Businesses looking to expand should also anticipate other services beyond payroll management. These include attendance, leave credits, taxation, and benefits. Check out the payroll management that allows the integration of added services.
What are the pain points to be resolved in payroll management?
As mentioned many times before, payroll management is a challenging task. Some pain points need to be addressed including labor or employment laws and tax compliance.
How to Manage Payroll Efficiently
Many HR managers are still confused about deciding which best practices could help manage payroll efficiently. Here are a few tips to remember:
Create a payroll calendar
A payroll calendar guides you to know how many days you have left before the next pay period. If you’re paying your employees on a weekly basis, there are roughly 52 pay days in a year. If you're paying biweekly, employees will receive 26 paychecks annually. The payroll calendar sets your payment schedule for you to plan out your employee payout.
Be updated about labour laws and payroll regulations
Rules governing payroll and human resource management are constantly changing. Efficient payroll management should always take this into consideration to ensure compliance.
Let employees know how the payroll is calculated
Employees should know how their salaries and benefits are calculated. Be transparent about payroll policies and how the compensation is computed.
Integrate payroll with attendance and timekeeping
Payroll preparation is easier when integrated with attendance and timekeeping. Computing salaries would be easier if you use attendance software to track absences and leaves.
What is Payroll Outsourcing?
Payroll outsourcing is the act of engaging a third party in payroll management and salary disbursement. In this age of remote work and staffing, payroll outsourcing could be a viable option for business owners who wish to streamline their accounting procedures. Hiring an external firm will let you avail of services including:
- Calculating employee wages
- Maintaining and updating employee records
- Adding bonuses and other benefits
- Managing reimbursements
- Complying with labour policies
- Generating salary and taxation reports
- Tracking working hours
- Releasing the pay
- Completing annual tax obligations and requirement
When Should You Outsource Payroll Management?
Payroll outsourcing may not be suitable for all businesses. Some organizations may have in-house experts who are experienced in managing the payroll. However, if your company is struggling to reconcile employee pay and benefits with the accounting process, then it is time to consider help from external parties. Other reasons for outsourcing payroll management may include:
- Workforce size and location - Big companies and those whose staff are mostly from different locations could benefit from payroll outsourcing. However, even when you only have a few employees who are working remotely, payroll outsourcing could still be beneficial.
- Employee reassignment - What happens to the employees who use to manage your payroll? Will they be reassigned to other departments where their skills and experiences could be useful? Will they still compose the core structure of your HR and payroll team?
- Team ability to manage payroll - Are your current employees capable of managing your payroll efficiently? If yes, then maybe outsourcing the service is not necessary. However, if you think your team lacks the experience and skills, then maybe it is time to tap third-party payroll service providers.
What to Consider Before Outsourcing Payroll?
Outsourcing will ensure payroll management efficiently yet it comes with a price. Before deciding which software or third-party providers to choose, consider a few important things. Managing employee payroll efficiently may cost you money especially if you’re seeking for providers with good reputations. The expense may even be higher depending on the additional services you may require. Check for companies that ensure data protection. Zebra and other payroll management service providers comply with data protection and privacy keeping your company information safe.
Conclusion
Managing payroll efficiently is a skill enhanced by experience and expertise. Whether you opt for software or payroll management outsourcing, the goal is to keep employee pay and benefits accurate and on time. Outsourcing to providers like Zebra guarantees not only employee satisfaction but also accuracy and accountability that's worth your company’s money.
