Human resource is the most important resource of an organization. The fate of the organization lies in the hand of its man power, so its management in most effective way is must. Employees should be kept satisfied and motivated for the better functioning of an organization. Paying remuneration and the compensation plays an important role in employee’s retention and satisfaction .It is the way of rewarding their contribution in the organization in monetary terms. Employees get paid for their hard work and effort at the end of each month .Organization have to kept very careful watch on the employees behaviour, working schedule, attendance, leave pattern etc so that correct information can be obtained for the generation of pay slip..
Paying employee is a part of business and it is one of the largest expenses of an organization to spend a part of his wealth on managing their most important assets. Payroll mistakes can have negative impact on the employee satisfaction so it should be done very carefully. The preparation of pay slip is most tedious, time- consuming task which demands high level of accuracy. In order to make this task faster, easier, stress- free and accurate, nowadays business houses has automated this process by implementing software called payroll software.
Payroll software: It allows complete payroll calculation including employee’s attendance, tax calculation, deduction if any and automatic generation of payslip leaving all the manual calculation behind. It eliminates all possible sorts of error during payroll and improves processing and efficiency of HR department towards employee’s problems, queries and demand, thus improved HR-Employees relations. Payroll software came up with many features some of them are:
Employees Details: Payroll software provides us a tool to manage employee’s complete details regarding their attendance, leave, over-time, daily punching-time etc. In a glance we could go through the complete details of an employee’s punctuality, types of leave they are currently on, how much leave they are entitled to etc and can make necessary addition and deduction while drawing payslips. These information are not important only payroll point of view but also important for future planning and decision making .For example through payroll we have accurate details of employees leave, in future we can make the decision keeping that data in consideration, we need not to have done manual calculation or going through book of attendance and leave.
Error free: Maintaining and recording each and every employee personal and professional detail on books and then making necessary calculation accurately on the basis of that information for drawing their pay-slip is a painful and laborious task for the HR staff because any minor mistake could become the cause of chaos within the organization. It demands high degree of alertness, attentiveness, accurate mathematical calculation, rechecking etc in order to keep the task error free. But with payroll software this ever challenging, time-consuming task will be done within hours by just running finger over the system keyboard. All the information is stored in the system and all the calculation on the basis of that will be done by the software. We have to just take caution while making daily entries of employee attendance and leave.
Cost-effective: Payroll is part of every organization whether big or small and generation of payslip at the end of each month means a full stop in the normal routine function of HR staff. Organization left with two options either engaged their staff members for generation of payslip which interrupt their normal functioning or handover this task to third party. Former will affect the productivity of an organization or later will add extra cost on the expenses. But through payroll software this task can be done in much easier and simplified way without any interruption and without in-rolling extra stuff from outside the organization which will increase organizational liabilities.
Security: Handing over the task to the third party not only adds extra cost but could also pose threat to the organizational security. Sharing information about company employee, their salary and other personal and professional details with the people outside the organization is not considered safe because no one know when and how one can manipulate your data base. But managing payroll within the organization ruled out such possibilities and help in keeping our data private and confidential.
Tax compliance:Calculation of taxes is most important aspect of payroll. For accuracy in Payroll, company compliance with state, local and federal tax regulation is must, any type of in-adequacy in data expose company to the employee litigation, tax fines and penalties. So company have to stay up- to- date with ever changing tax slabs and regulations. If company go through manually, it requires professionals of the field because any error will incur expensive fines for the company. But with payroll software no field expertise is required; upgrade software with necessary documented changes, allow company to keep abreast of changes in legislation and prevent the company from violating any rule and regulation. Organization nowadays managing their payroll either by:-
The complete process of payroll is processed within the organization, from data entry, monitoring, making necessary deduction, tax filling etc entire task is done by the staff member. It is flexible and efficient, last time correction can be done any time within tax filing deadline. Company have the entire database of their payroll which can be accessed any time when required.
The taxing agencies, that continually change regulation and access penalties and fines for late or missed payment, forces company to look for other option which let off their burden of tax filling. Outsourcing is one of the option in which whole task is handed over to third party and company can concentrate on their core business activities. But it does have few downsides, lack flexibility; it cannot accommodate any special request such as custom report or unique deduction handling etc. If any correction have to make, any adjustment have to be done it will take longer time, cannot be rectified when demanded. Company have to adjust their timetable according to the service provider. Any error during the payroll process by the service provider held company liable for that.The most important thing the confidential information is in the hand of the third party.
Most of the companies outsource their payroll just to avoid the hassle to keep up to date with the ever changing tax filling that is required. Company nowadays moving towards the blending in-house product and outsource service to create best payroll solution. They feel it convenient to manage their payroll in- house but outsource their payroll tax compliance. This way they can offload the most difficult part of payroll while keeping maximum control and flexibility associated with using in-house payroll software. It will add efficiency in functioning of business.
It’s on the preference and need of company that which payroll system they want to adopt for managing their payroll. But it is true that payroll software provides easy solutions to the payroll. It is very efficient and effective for every business houses either be big or small. It speeds up the payroll processing saving time and energy; eliminate duplication of entry and cycle check, centralized employee data base and improved efficiency and productivity of employees. It has numerous advantages over manual payroll processing just involving the cost of one time software implementation, annual maintenance charges to keep it upgrade and the training of the staff. If we weigh this cost against advantages, it will be negligible.