Payroll management is an integral part of business administration that allows employers to keep track of their employee details and payments. Proper payroll management can simplify payroll processing, increase the productivity and efficiency of a business, and improve its administrative functions. At a glance, it seems easy to handle the administration of financial records and calculate employees’ salaries, allowances, deductions, etc., but it is challenging to handle payroll management services with ease.
Changes in business scenarios are occurring faster, new rules and regulations are regularly evolving, and financial conditions are putting pressure on companies and their employees. However, here are a few payroll challenges shared by Experlu – an online platform for hiring auditors and payroll provider) that organisations face with solutions to reduce inefficiencies of an employee and support their well-being.
Payroll management challenges and their solution
- Manual processing
Organisations believe that manual payroll processing can save them money. Though it seems a cost-effective solution, it is hazardous and involves human errors, duplications, etc.
Solution: You need to automate your payroll process with the latest financial tools or outsource payroll services to accounting firms. Ask an expert to nullify the chances of errors and loopholes in the payroll process. They have expertise in identifying errors and providing you with the right solution.
- Payroll compliance
Payroll management becomes difficult when you navigate complicated tax laws, yet you need to follow accuracy and timeliness to maintain payroll compliance. The payroll management system needs to follow a timely practice of tax filing and adhere to statutory compliance requirements. Not meeting these standards may result in significant penalties or legal liabilities affecting the company’s credibility.
Solution: Using an automated cloud-based payroll management system can provide sensible solutions to small and medium-sized businesses. Outsourcing Payroll Services to expert accountants is another way of handling compliance management challenges.
- Time-consuming payroll configurations
In-house payroll processing consumes a significant amount of time for the organisation and seeks more attention and effort in compiling data, checking records’ accuracy, maintaining compliance, and doing complex calculations. Additionally, it includes a massive amount of paperwork and a burden to the payroll management team.
Solution: Use an automated cloud payroll solution, an electronic payroll system, or outsourcing payroll to experts.
- Security issues
Payroll includes maintaining confidential employee information in spreadsheets and is vulnerable to data breaches or payroll frauds. With manual payroll processing, fabrications like false commissions, fake insurance claims, mishandling of data or information leakage increase. Using a payroll system with no proper security measures may lead to phishing and cyber-attacks.
Solution: Outsource your tasks to reliable accounting firms like 123Financials, which work with a team of experts with years of experience handling client data and using secured payroll management systems. You can use a secure and scalable cloud-based payroll management system for the company.
- Managing software non-compatibility issues
If your company uses multiple payroll input sources that keep employee records, employee performance, employee benefits, etc., ensuring the compatibility of payroll records with all other sources becomes challenging.
Solution: You need to invest in software that integrates HR and payroll functions and streamlines the whole payroll management process. Additionally, it reduces the time spent on recording data and tracking them, and ensuring the company’s efficiency and cost-effectiveness in the long run.
- Use of outdated payroll systems
The use of outdated payroll systems makes the payroll teams spend a significant amount of time performing repetitive and mundane tasks. It affects your team’s morale and overall productivity and is easily vulnerable to errors and fraud. With conventional systems, sharing reports among departments and maintaining backups of crucial data becomes challenging.
Solution: You can use specialised payroll software that deals with payroll challenges and make way for more innovative workplaces. To deal with payroll challenges professionally, you can outsource the critical functionalities to exports in this area.
There are several challenges associated with the payroll management system of an organisation. However, you can efficiently deal with payroll challenges by minimising the paperwork, converting manual tasks to automated results, selecting the right payroll software, and staying up-to-date with the payroll legislation.
If you find using a cloud-based payroll solution or another specialised software challenging, you can outsource the task to accounting firms. They clearly understand your industry and stay updated with the current government regulations. With the help of their expertise, skills, and knowledge, you can deal with payroll challenges efficiently.
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