Processing payroll may be the most important HR function. It also might be the most complex.
Steps such as recording time, calculating pay, making healthcare deductions, and withholding taxes must all be done accurately and quickly. Your HR team could be strained, your organization could be fined or your employees could be disappointed if you don’t process payroll properly.
Almost all organizations use an application to process payroll given its importance and challenges. Organizations are 11.5 times more likely to replace their payroll application if it only meets their needs sometimes or not at all, according to the Sierra-Cedar 2019–2020 HR Systems Survey White Paper.
Twenty-seven percent of organizations surveyed by Sierra-Cedar were evaluating their options or were planning to replace their payroll application within two years. “Replacing a Payroll application is difficult and time consuming, thus explaining why organizations retain existing vendors,” researchers wrote.
But you don’t have to suffer through your problems to avoid the hassle of changing. Bringing in an outside pair of eyes to improve your processes and optimize your systems can ease your pains. The following list summarizes the main areas that tend to be the center of payroll challenges that an outside pair of eyes will look at during an optimization.
You must know when an employee worked to pay them correctly for their time. But time may be recorded incorrectly or falsely if it is entered manually instead of automatically. Ensure that you pay employees properly through an accurate time and attendance software.
Federal law requires you to pay hourly employees at least 1.5 times their normal wage if they work more than 40 hours in a week. Does your payroll software help you avoid penalties for not paying overtime properly by calculating payments automatically?
Complying with regulations
Meeting federal, state, and local terms for requirements such as minimum wage and taxes takes constant vigilance. Laws change often, particularly if your organization operates in multiple jurisdictions. Your payroll software should help you maintain compliance even if you have employees in more than one state.
Payroll applications can simplify the storage and retrieval of employee records. Retrieving old timesheets to show hours worked or a history of paychecks to document payment is easier when information is stored electronically instead of as paper files.
Your payroll team must protect employee information while processing payroll efficiently. Knowing how your payroll software works is essential for achieving both purposes. Improve productivity and increase security by training your team to use your software’s latest features and upgrades.
Payroll applications will continue to evolve, and emerging trends to watch include the following, according to Sierra-Cedar.
- Pay Equity and Transparency Tools
- Machine Learning
- Blockchain Payroll Solutions
Many companies wait until after a pay period ends to collect timesheets, gather payment authorizations, and run payroll. But this may not give payroll administrators enough to ensure accuracy.
You should be able to speed the process while maintaining accuracy by gathering data in real-time through a correctly configured payroll software, thus avoiding the need to wait until a pay period ends to begin running payroll.
You can’t run payroll without administering benefits. But you may struggle to administer benefits correctly or calculate payroll properly if your payroll and benefits administration applications aren’t compatible. Is your payroll application integrated with your other systems properly to avoid problems.
Employees expect technology to let them do anything by themselves, like view pay stubs or update their direct deposit information. Your payroll application should have a strong employee self-service component that makes routine tasks convenient.
Processing payroll may be complex—and it certainly is important. But it doesn’t have to be difficult or painful. Choose a payroll application that meets your organization’s needs and configure it properly to increase efficiency.
Did you answer no to many of the questions above? Reach out to Providence Technology Solutions today to learn how we can help you improve your payroll software and processes through a Human Resource Optimization Review.
Contact us today to discuss your payroll software needs online, by email at email@example.com or by calling 904.719.8264.