There was a time when a company’s payroll department had to calculate everything — from taxes to insurance deductions — manually, without help from computer programmes or even calculators. Luckily, the way businesses operate has been revolutionised by technology and payroll management and deductions can now be managed and automated with special payroll software. There are several sizable benefits to using a payroll software solution over old-fashioned, manual methods of dealing with employee pay and deductions.
In a bygone era, a company’s accountants and payroll department would have to familiarise themselves with tax rates, deduction amounts and percentages, and a flurry of mathematical adjustments and calculations as they applied to each employee’s pay check. This made payroll an especially time consuming and complex task, characterised by a large department of number-crunching accountants checking and double-checking their work.
Payroll software has reduced the need for this tedious task. Instead, these software applications are familiar with the tax rates in multiple countries and jurisdictions. Simply set up the payroll software to work with your particular country and it will do the rest: it can figure out tax rates, National Insurance deductions, and any other matters that apply to an individual’s pay check. Companies can even set up their own deductions for things like pensions and other benefits. And there’s no need for calculators or a room full of accountants: the software takes care of the task automatically and in a matter of seconds.
Without the need for a large accounting staff dedicated solely to employee pay, companies can feel free to minimise the size and scope of both their payroll and accounting departments. This can result in a significant year-end savings that can be the difference between ending the year with a profit and ending it without one.
Payroll software stores a vast number of archives in its database, and these records are searchable by company employees. That means past pay stubs can be pulled up at any time — either by employees or by the payroll department — and checked for errors, discrepancies, or other items. These archives can also keep a record, and a running tally, of all relevant deductions per pay check and per month or year. This allows employees and the payroll department to see exactly where their money is going when it is deducted, and how much they can expect to be deducted, on average, per pay check.
Many releases of payroll software can integrate with a company’s existing electronic time recording system. This is important, as it will help to pay employees only for the precise amount of time that they were actually on the job. Payroll software can manage employees’ pay by integrating with these systems and paying an hourly rate based on quarter-hour increments or even less. That means a late employee will not earn the same amount as someone who came in early, got the job done, and left fifteen minutes late to ensure that it was done right.
Payroll software results in higher efficiency for business as well as a sizable cost savings year-over-year. Additionally, it ensures that employees can view their archived pay stubs and records, and that each employee is paid only for the time they were on the job — rather than giving them the benefit, and payment, of the doubt.
© 2012 IT Network Wales