Payroll management is a core component of running a successful business. It refers to the process of remunerating the workforce for a pre-defined period of time. It includes an employee’s data and information like salary details, attendance & leaves, position, etc, to name a few
A reliable and efficient payroll management system compliments the overall financial integrity of any business. The company has to keep records of the salary structures and all other issues related to the workforce. Therefore, a reliable and robust payroll management software can be the ace card for business growth.
If a business can’t run payroll then the employees won’t be credited. Without a proper workforce businesses cannot operate properly. The employee instinct is to be remunerated on time so that they feel valued for their hard work. If employees doubt the organization in any way, the business can lose some serious numbers which will impact negatively.
One of the major challenges that businesses face is choosing the best payroll management system for themselves. The larger dilemma is to choose between in-house payroll management or to just outsource the entire payroll management process.
The option that suits best for your organization depends on the demands and requirements and how well the option aligns with them. Although both have their pros and cons and we’ve mentioned everything from the scratch till end to help in your decision making.
In-House Payroll Management Process
When a business operates with an in-house payroll management process it simply refers to them running their own payroll. A team is hired or selected internally, generally the finance or HR department, who overlook the entire payroll process, manually or through a payroll management software.
The people running and managing payroll are paid through the same payroll process that they’re looking after. Their responsibilities include preparing and checking payroll data, performing the entire payroll calculation, maintaining timesheets, calculating wages, printing payslips, distribution and calculations of taxes.
When it comes to running in-house payroll through a payroll management software, there are several options in the market to pick from. The payroll software handles almost everything related to payroll and furthermore saves time, is cost effective and ensures timely remunerations to the workforce. Payroll software being automated and compliant with all laws and regulations is the cherry on top.
Features of in-house payroll management
When payroll software is being sold as a SaaS product, the providers have plenty of automation capabilities to offer. Although the top payroll software providers usually have these features within their standard product. The following are the most common yet vital features of a payroll software;
➤ Payroll management & Run Payroll
The first and foremost step of any payroll management software is to process and manage the entire payroll process. If this base is strong and sturdy it automatically provides the foundation for every other additional feature in a payroll software.
➤ On-time credits
The idea behind a payroll software is to credit the employees directly and on-time to avoid lack of morale and productivity from their side. The days when handing out checks at the end of the month are long gone.
➤ Automatic Tax Filing
Calculating taxes manually always has room for errors. These errors should be avoided at any cost as they can affect the entire payroll management process. To avoid any miscalculations or issues with government and other payroll taxes, it’s best to rely on a payroll software to do the work for you.
➤ ESS (Employee Self Service)
Employee self-service empowers the employees with personal payroll data at their fingertips. They have easy access to their pay slips and other payroll related data like forms or balances without seeking anyone else’s help. The workforce doesn’t have to make time to approach the HRs to request these things and information.
➤ Insights & Reports
Payroll insights & reports provide an overview of organization’s budget, taxes, employee compensations and other vital payroll data. These reports can define the trends and patterns which HR and accounting departments can bring to use to improve their operations and other key functions.
➤ Compliant with laws and regulations
Compliance is the most vital aspect of running a payroll. Keeping in line with all relevant rules and regulations ensures that your business is up-to-date and operating legally. This avoids any legal action and potential fees that may arise on the business from lack of compliance management.
Pros and Cons of in-house payroll management
|Easy Customizations||Requires a team|
|Cost Effective||Salaries of team|
|More internal control||Requires learning|
|Ease of access||Human errors|
|Adaptation of technology||Software cost over team cost|
|Access to history and reports|
|No third party employement|
|Compliant with laws and regulations|
|Fatches data on its own|
|Pays directly in employee accounts|
|Calculates everything from bonus to deductions|
Outsourcing Payroll Management Process
When outsourcing the payroll management process, the organization is basically hiring another firm to look after its entire payroll process.The organization taking up the responsibility of another’s payroll process will manage all functions. From calculating salaries and taxes to being compliant with law and regulations.
A reliable and great outsourced payroll service provider makes the organization feel like the third party is a part of their own team. The services can be tailored according to the requirements.
Outsourcing payroll process is the answer for you or not will depend on the requirements of your organization. Furthermore, if the organization doesn’t have the proper staff for running and managing payroll processes, then outsourcing payroll is a viable option.
Some businesses would go for outsourcing payroll just to save time and money, as no payroll staff nor any software package would be required. The business also wouldn’t have to worry about keeping pace with the latest pay legislation and laws.
In a survey it was also concluded that businesses that maintain an in-house payroll process spend 18% more than the average spending of businesses that go for outsourcing payroll processes.
Outsourcing payroll includes hiring a third-party firm to manage and handle the entire payroll process of a business to save them time and cost in the long run. It also saves time and cost of training employees as payroll staff or training how to use the software properly.
However, at the end of the day, the decision rests in the hands of the management and organization and on the complexity of the payroll function of the business.
Features of outsourcing payroll management
➤ Time Saving
By outsourcing payroll from a reliable and renowned provider, the management and organization has more time to focus on what matters the most. Furthermore, if there aren’t any errors or misunderstanding then the payroll providers will likely only need to reach out once per pay period to notify the owners that payroll has been processed successfully and employees are credited.
➤ Proper Taxations
Even after the payroll figures are well-structured and recorded, the additional responsibility of payroll tax calculations are still there. When outsourcing payroll, the third-party carefully calculates and manages the payroll tax too on the business’s behalf to prove that the proper amount of payroll tax has been withheld.
➤ Looked by experts
A professional payroll company who offers outsourcing payroll hires individuals who know payroll processing like the back of their hand. These professionals specialize in the complexities of running and managing payroll along with calculating taxes, as well as compliance with government regulations.
➤ Cost Saving
A business saves a lot of precious money when it seeks reliable outsourcing payroll services. With an outsourcing solution, the company doesn’t invest in technology or qualified staff to run with the technology. They just need to contact the third party for managing and running the entire payroll process, thus, reducing the cost being spent on running payroll.
➤ Business stays up-to-date
As managing and processing payroll is the job of an outsourcing payroll service provider, they have to stay updated with the trends and changes. This helps all businesses in the long run. With the third party on track, it can then be tailored according to your business needs. With rules changing every so often, businesses may find it hard to update their payroll processes accordingly
➤ Accurate and Authentic
Trusting an expert nowadays ensures authentic and accurate data at your disposal. First and foremost, they themselves go through every report and data in detail. Once everything is clear, it can be passed to the client organization as the error-free information.
Moreover, it’s favorable to adhere to newly added policies and regulations as the industry changes.
Pros and Cons of Outsouring Payroll
|Hassle free experience||Lack of privacy|
|Cost Effective||Costly for small businesses|
|Time saving||Lack of coordination|
|Compliant with laws||Difficulty in accessing data|
|Integrations and benefits||Human errors|
|Managed by experts||Deadlines can be missed|
Finding the right Payroll Software
If you’re looking for the best payroll software for your business you’ll need to consider a few checkpoints before making the decision. Security is always the top priority of any firm.Payroll data includes an organization’s most sensitive information, such as employee or company bank account details, salaries, and other data.
Ensuring that the payroll service provider has sufficient resilience in its service to ensure little or no down time. A reliable and robust payroll software easily integrates with other business functions.
Payroll runs through data, the majority of which is fetched from the central HR system. Going for a payroll software that integrates with other systems such as HR Software, Time and Attendance, Performance Management Software, etc., will speed up the pay runs, make them more accurate, and make the whole process more secure.
The payroll service provider should offer great customer service and support. Entities like Zimyo invest in training the customer care teams, who then have polished problem-solving and communication skills.
Companies like Zimyo also provide training and constant support to customers as well on how to use the payroll software. Even in times of unseen changes like new tax laws or compliance. Being one of the top payroll service providers in India, Zimyo proudly claims the title of providing #1 Employee Experience to workforce and organizations around the world.
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