Processing payroll is complex for businesses of any size. From the basics like calculation accuracy to more complex issues such as compliance with tax law, the sheer amount of data processing and room for error can be overwhelming. Fortunately, many modern scheduling and time tracking systems time tracking systems have integrated payroll functions and can do nearly all the hard work for you. So for medium or large business with large employee populations, or small business looking to minimize scaling pains as they grow, we’ve put together four ways that automating payroll will save you time and money.
1. Large reductions in payroll processing costs
Between maintaining accurate time sheets, calculating pay rates, overtime, paid and unpaid leave, and myriad other factors, calling manual payroll processing error-prone is an understatement. In fact, it is estimated that automating payroll reduces processing costs by as much as 80 percent with much of the savings in eliminating error. This can have significant impact for a company’s bottom line, but it’s also a massive time and energy saver for the HR managers who do all the processing and re-processing of payroll data. Further, switching to online, paperless payroll processing (https://tracktime24.com/) cuts down on paystub printing and distribution costs.
2. Eliminate wasted resources from payroll mistakes
As mentioned above, automating payroll eliminates a majority of the opportunities for error in processing. Online employee time tracking systems (https://tracktime24.com/) that incorporate payroll processing go step further and automate employee time sheets as well. When employees clock in and out via time tracking software, there’s never any confusion or discrepancy about what hours were worked and by whom. The software collects all the data, adjusts for pay rate, attendance, and any other relevant factors, and then automatically turns all this data into payroll. This eliminates wasted time and the potential for error that comes with copying data from timesheets or fiddling with spreadsheet formulas.
3. Stay in compliance with the law
In 2016 the IRS issued nearly 6 million penalties related to employment taxes. Fortunately, tax calculation and compliance functions included in many payroll software solutions will go a long way toward keeping your company out of that statistic. With automation that covers employee time tracking, tax compliance, and overall payroll processing, the chances of getting an IRS penalty due to payroll mistakes or miscalculations is dramatically reduced. But even if your payroll automation doesn’t include sophisticated tax compliance features, just having the clear, start-to-end payroll processing data reports can be enough to head off problems with the IRS.
4. Easy reporting and record keeping
Manual or even spreadsheet-based payroll processing can make for messy, time-consuming reporting. With online cloud-based payroll automation, all payroll documents and records are stored in one place and accessible remotely from any computer or device running the appropriate software. This consolidates payroll reporting into easily searchable, archived reports that can be generated at any time. This is a benefit for both employers and employees who need convenient access to this information, but it also aids with legal compliance. The IRS requires employers to keep detailed payroll reports for four years and the U.S. Department of Labor requires them for three years. Instead of wasting time and space manually filing payroll reports, switching to an online automated system keeps everything organized and accessible without any effort on the part of HR managers.