In an ideal world, when you check stubs and run payroll would never have any problems. Data would always be entered accurately, taxes easy to calculate, and deductions would be simple to determine. However, as you know, this is rarely the case.
Often, payroll employees are working last-minute to calculate paychecks for every employee, and unfortunately, this time crunch can easily result in errors. Payroll errors can cause a number of different problems (including incorrect pay distribution and potential fines), but fortunately can be easily prevented by using payroll software.
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The Automation Advantage
One of the biggest advantages of using payroll technology is the implementation of automation. While this does require you to place a bit of trust in the system that you’re using, the majority of payroll systems calculate everything correctly the first time and therefore don’t require any additional amendments.
In addition to basic gross pay calculations, they also compute relevant taxes and even take care of both voluntary & involuntary deductions! Complete payroll solutions such as UZIO can even take care of payroll distribution for you, allowing for an entirely hands-off approach to payroll.
Time & Attendance Calculations
Many payroll systems have a built-in T&A (Time & Attendance) feature that allows employers to track employee hours via digital time cards. Employees use an identification number to clock in or out using the payroll software. This setup has a number of advantages: from the employer’s side, it helps prevent time card fraud by eliminating easily modified physical time cards. For employees, this system allows them to receive the most accurate time logs, ensuring that they are properly compensated for their time.
Easy Employee Compensation
If your company uses manual processes, employee T&A data will need to be gathered, compared to employee pay rates, then calculated on a per-employee basis. This process can take longer if your business pays employees using a combination of salary & hourly pay, and even longer if your employees have worked overtime during that pay period.
However, payroll systems will use the T&A data already gathered to calculate employee compensation, instantly determining their gross, regular, and overtime pay. Since the system calculates compensation in real-time, you’ll never have to worry about payroll getting behind!
Taxes (Correct The First Time)
Taxes are complicated, and depending on your jurisdiction, may include additional taxes beyond the standard federal and state taxes. With manual processes, you’re relying on your payroll department to stay informed on all relevant taxes. Tax rates change frequently, making this a challenging task, but if you employ remote workers, the chance for errors quickly rises.
Unlike local employees, remote employees may be subject to different (or additional) taxes that must be calculated as well. Thankfully, a payroll system such as UZIO eliminates the need for tax law research, since the system will automatically calculate taxes based on an employee’s address information on file.
Simplified Deductions
Employees often have a variety of deductions that are taken out of their paychecks. These deductions may be voluntary (such as retirement plan contributions) or involuntary, such as child support payments. Keeping track of all these different rates for every employee can pose quite a complication if your staff is manually calculating payroll, but it’s not an issue if you’re using a software solution. The system keeps relevant rates on file and uses these to calculate deductions on every paycheck, eliminating the possibility of mistakes being made due to human error.
Summary
Payroll technology offers a number of advantages over the traditional manual method, and error elimination is just the tip of the iceberg! Using this software will prevent errors, eliminate the time needed to recalculate/reissue paychecks, and prevent the payroll department from getting overwhelmed.
This is especially important for businesses with plans for expansion since an increase in new hires can quickly overwork a department that relies solely on manual processes to manage its payroll. Even if you only employ five or six employees, investing in a payroll solution can easily save you time, prevent unnecessary errors, and provide you with peace of mind.
To learn more about what payroll & HR technology can offer you, click here.
Author Bio: Mohd Sohel Ather is the Senior Principal Software Engineer. He has studied computer Sciences at the Institution of Electronics and Telecommunication Engineers (IETE). An excellent software engineer, Sohel is also a passionate tech blogger. He loves to stay in the loop of the latest software technology updates.
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