Payroll Management seems like a simple task where you consolidate hours worked, calculate wages owed, and send out paychecks followed by updating the records. Yet, when it actually comes to payroll management, every organization faces its unique set of challenges.
A recent survey by Deloitte revealed that reporting of taxable compensation to local payroll, tax withholding obligations, and year-end processing procedures are among the top payroll challenges that organizations face and almost 35 percent of respondents indicate that maintaining the accuracy of withholding calculations for regular or supplemental pay is a big problematic area.
This clearly indicates that managing and processing payroll for employees can be a complex task considering the financial and legal implications attached to it. In this post, we are discussing the top 5 challenges that companies face when it comes to payroll management and the probable solutions they can look at.
5 Main Challenges in Payroll Management
Among the common setbacks and challenges that the payroll industry witnesses include –
- Compliance Management
Navigating complicated tax laws makes payroll management a difficult task to manage, but it is essential to follow accurate and timely practices when it comes to payroll and compliance. Irrespective of the reason (negligence, lack of understanding, etc.) for not following regulations or not filing taxes accurately and on time, there can be huge penalties or legal repercussions for non-compliance.
What is the solution?
To ensure that all payroll processes comply with the changes, payroll providers have to consistently monitor changes in legislation at all levels. From an organization’s perspective, the payroll process should be built in a way that it complies with all the industry-level requirements. Further, it is recommended to hire a professional payroll service provider to manage your payroll, one with expertise in the taxation laws of your country, and many years of implementation experience.
- Time-Consuming Payroll Configurations
In-house payroll processing consumes a great deal of time for any organization. This time spent by the payroll staff on compiling data, checking the accuracy of worked/recorded hours, complying with government regulations, and calculating the fine details of salaries and deductions can actually be used more productively on other strategic business tasks.
Additionally, due to a great deal of paperwork, the whole process is highly susceptible to errors, putting a massive burden on the HR staff.
What is the solution?
The best way to save time and not get hassled with details of payroll processing is by using an automated cloud payroll solution for seamless payroll management.
- Safety and Security Concerns
Security is a major challenge when it comes to maintaining confidential employee information in cumbersome spreadsheets. Payroll frauds can be committed in various forms, such as false wages and commissions, having ghost employees, or faking injuries to claim insurance.
Manual payroll processing increases the chance of such data mishandling and leakage of information leading to multiple issues for businesses. These kinds of payroll issues especially happen when there are no internal controls or when employees have access to critical components of the epayroll software.
What is the solution?
Using a comprehensive cloud payroll software, payroll and compliance audits on a periodic basis, and random inspection of databases are some of the ways to tackle this issue.
- Dependence on Multiple Payroll Input Sources
Another common challenge in payroll management is the non-compatibility of payroll management software. For example, the software used for keeping employee records may be completely different from the one that you use for leave management, performance, or employee benefits.
What is the solution?
Investing in software that can integrate all of the above-mentioned functions not only helps in streamlining the overall process but also reduce the total amount of time spent on inputting data or tracking, thus allowing your company to become more efficient and cost-effective in the long-run.
- The Burden on Payroll Team
Manual or outdated payroll systems make the employees spend most of their time carrying out repetitive, mundane tasks over and over again, affecting their morale and overall productivity. It also makes it difficult to produce reports and share information within the company. Further, manual payroll processing requires keying in data and calculations that make you prone to errors or duplication, which can lead to even bigger payroll issues for the organization.
What is the solution?
The key here is the automation of the payroll process. Using specialized epayroll software, you can be sure to solve all these issues and enhance the productivity of the organization.
To Wrap
When it comes to tackling the challenges related to payroll management, using an automated cloud-based payroll management software is the best solution that organizations have.
Payroll provides an intelligent payroll management system for building smarter workplaces. Get in touch with our payroll and compliance executive to know more about Payroll and how we can manage your payroll better.
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