Whether an organization is small or large, processing payroll is one of the most important tasks. Errors and delay in payments can lead not just to disgruntled employees, but can also attract legal penalties due to overlooked regulations.
The IRS estimates that 40% of small and medium business owners end up shelling out an average of $845 per annum as fines because of incorrect payroll processing. In addition to the monetary fine, an incorrect payment will also require additional hours to fix, which then eats into other productive tasks.
An effective payroll system that is augmented with accurate employee record-keeping, attention to detail, and is technologically sound can save a business thousands of dollars through direct and indirect costs.
Successful payroll operations are based on the accuracy of the data they collect. Spending a little extra effort in the initial stages of data collection and organization can improve the process multifold in the long run.
The payroll process can then be streamlined by taking inventory of the steps involved, filling in the information gaps right at the start rather than scrambling towards the end, and taking stock of legal and compliance requirements. This will help determine the time commitment required for each task and the possible costs.
Advanced software and automated payroll solutions are already improving speed and reducing error. Another means to update the process is to consider integrated HR solutions. This will enable process standardization and also improve transparency as different teams can get access to information whenever required.
When software takes over routine tasks like benefit calculations or pay upgrades, the role of a payroll professional can also expand beyond processing to include other productive tasks like trend analysis or solving atypical errors.
Although payroll processing is integral to business, it does not generate any direct revenue. Instead of dedicating in-house effort to the tedious process, many companies choose to outsource payroll or even HR functions to a third-party vendor.
By teaming up with an external provider, you can save on training, data storage, data security as well as continuous monitoring of federal and state compliance laws.
Whether you choose to handle payroll internally or hand it over to an outsourced provider, accurate processing can help you save on the two most important resources in business – time and money, which can then be dedicated towards more important tasks.