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What is the Payroll Management System in HR Evolution?

If you are a business owner or working in the HR department, you have to pay salaries to your employees. For doing this, you have to calculate the amount of payment accurately. A good payroll management system can make the process speedy, efficient, and safe. Therefore, you should have sound knowledge on – what is the payroll management system and how it works.  

In this blog, you will know what is the payroll management system and how can you use it effectively in your organisation.

What is the Payroll Management System?

Payroll is a list of workers who get salaries from a company. A payroll management system is a software that is used to manage the financial records of employees. It is used to manage basic pay, net salary, bonuses, deductions, etc., of the workers.    

What is the Payroll Management System

The payroll management system has a significant impact on HR Evolution. Earlier, the HR departments and accountants had no other options but to manually calculate the employees’ payroll. It required a massive amount of time, effort and paperwork. Nowadays, HR tasks have evolved; they’re better, efficient and more agile. Plenty of solutions are available for payroll calculation. You can choose the most suitable software as per your business needs.  

How does Effective Payroll Management Affect Your Company?

An effective payroll management system can be a revolutionary tool for your business. Here are the impacts of an excellent payroll process on your workers.  

Business corporate meeting of successful team. Office discussion

  • You can improve employee engagement with a sound payroll management system. It is necessary to pay salaries to the staff on time for their service and effort. Because when employees get their salary on time, they become more dedicated to their work.  
  • Paying salaries on time is the indication of good management. Your employees will realise that you value their contribution. So, they will remain loyal to your company. 
  • You can avoid paying unnecessary government fines and penalties. For example, if you conduct payroll calculations manually, there are chances that the government’s payments might get overlooked. As a result, you will have to pay a penalty. On the other hand, payroll software will keep track of all legal liabilities, including government tax. So, you can avoid undesirable consequences and save your money.  

Key Benefits of a Payroll Management System

The benefits of a good payroll management system are vast. However, a manual payroll system requires a prolonged process compared with an automated payroll system. 

Business Graphs and Charts Concept with PAYROLL management system

The top benefits of the payroll management system are given below: 

1. Lower Your Expense   

A good payroll management system can dramatically reduce your cost, which means more cash flow in your business revenue stream. Otherwise, you will have to employ a number of accountants and HR to do the task manually. Now, you don’t need to pay them, as the computer will do your task in real-time. 

2. Ease of Use and Precision                    

Humans are smart, but computers are accurate. Firstly, payroll management software is easy to handle. Secondly, it has incredible reliability. Once you start using software, you will never have to worry again about precise calculation and loss due to miscalculation. 

3. Easy Forecasting

With an automated payroll management system, you can immediately access and take control of all your payroll expenses. By using this, you can graph your data to create a forecast for your business. Firstly, forecasting will facilitate you with a clear idea about your company’s current position and future performance. 

Secondly, you will know if you need to recruit new employees and resources for your business. Thirdly, you will be able to calculate and adjust the salary increase of your employees. Finally, it will be easier for you to know if your decision is right for the business.

4. Time-saving 

Time is money. Manual payroll calculation requires extra time and human effort. On the contrary, the payroll management system software boosts all the relevant things associated with payroll with its automated and fast working capacity. 

While this payroll software is occupied with all the time-consuming processes, you can focus on achieving important business objectives and milestones.  

5. Safe Backup

Generally, the HR department faces difficulty handling and storing a huge amount of data. It is hard for the HR team to store a pile of information and documents in manual procedure. To store data and information, you can use payroll management software. If your system is hampered due to any mishap, you will find all of your data online as your documents are backed up online. 

6. Facilitating the Regulatory Works

Payroll management systems help regulatory aspects like: 

  • Tax calculation 
  • Pay deductions
  • The necessary transfers 

If these are not managed accurately, they bear chances of hidden losses for your company. Additionally, inaccurate documentation can lead to penalties for your business. With an online payroll management system, you don’t have to keep up with all the newest government acts, amendments, tax rates, and other changes because your software will update the payroll requirements automatically. 

7. Fast and Convenient Payroll Reconciliation

You will find a variety of payroll reconciliation software online for comparing the current and previous monthly payroll. Moreover, you can customise the payroll system to meet your needs.

8. Preparation of Reports

With the payroll management system, you can process different kinds of reports, which are given below: 

  • Reconciliation reports
  • Income statement
  • Profit/loss report 
  • Management information system reports
  • User documents 
  • Customise salary pay register

9. Automated Attendance and Holiday Data 

The HR department has to record employee attendance, leave, and other related information. However, it is complex to switch constantly from one register to another for payment processing and tax calculation. For solving this problem, a super payroll management tool can be the best solution to HR payroll activities.  

All essential information and record required for payroll management are automatically updated from the database. It stores data of everyday attendance, yearly holiday, and employee leaves. In fact, this software will reduce a lot of time when you enter the management system to check the data.

10. Data Security       

Ensuring data security is a must for any business. Good payroll management software makes sure your data is safe and secure. Also, you will have safe and encrypted data management from a trustworthy system. 

Disadvantages of Payroll Management System Software

Cyber Attack Hacker Phishing Security System Concept

Payroll management has few disadvantages. They are the following: 

  • Cybersecurity issues like data loss or theft and fraudulence 
  • Information access problem 
  • A full-featured payroll management system can be pricey. 

You can manage these issues if you are cautious and learn to handle the payroll management system wisely.

How to Choose the Best Payroll Management Software for Your Company Needs?

While choosing a payroll management software, you must consider the following:

Consider Your Company’s Size and Budget

Consider how much your company is willing to spend on payroll management. For doing this, you can analyse the size of your company and the amount of cash flow.  

Coins stacked for payroll management of office desk beside calculator

The reason is your business budget, and the width of your business will shrink the number of potential software vendors. So, you can select one easily. If your company is medium or small, you may invest in a less expensive payroll management system. It will save the cost of buying high-priced software. Yet, it will execute the basic payroll functions needed for your business operation.

Check out the Security Features

While you choose a payroll management system for your business, look for the security features of the software. After all, information tampering and breaches are very common for companies.

payrol managment system security

If the tool is password-protected, then it can safeguard your data by reducing the risk of information leakage. For this purpose, ensure the payroll management system has good safety reviews and ratings. In addition, don’t hesitate to ask questions to vendor representatives regarding security issues. 

Look into Vendor Reputations as well as Capabilities 

After that, you have to compare the offers of available vendors. For this purpose, you can read reviews of their current and previous clients. If your company is big, you can invest in a payroll management system that is integrated with other functions of human resources management.    

Review Product Survey review product

Firstly, select your payroll management software from a well-known brand. It might be pricey to buy, but it will be a cost-saving in the long run. Secondly, ask the vendors about software capabilities. Thirdly, learn how many employees the payroll software can manage before using it in your company. Finally, see the demo of the software’s work, if possible.  

Investigate System Flexibility and Compatibility

After that, you have to assess if the software you are picking up is suitable for your organisation. If the software doesn’t match well with your business needs, payroll management will be challenging for you. Moreover, check out if the software is helping your business grow. If the software suits your business, it will increase efficiency. And the efficiency will lead your business to grow. 

Business man in suit ready for meeting

After considering key payroll management benefits, pros and cons, select a software that is the best fit for your business. 

Final Thoughts

The secret formula behind a successful business is giving 100% effort in every possible thing. For this purpose, the HR team does everything to improve the human resource management of a company.  As an HR manager, your job will be comparatively hectic if you are still following traditional and manual payroll processes.  It’s tough to deal with piled-up papers and spreadsheets for any person. However, adopting a computer-based payroll management system can solve your problems in minutes. So, learn more about Payroll for Beginners and enjoy the privilege of advanced technology.

Sage 50 Payroll for Beginners

Sage 50 Payroll is today’s trusted benchmark in money handling, and we can train you to use it without any prior experience.

Sage 50 Payroll for Beginners

Sage 50 Payroll is today’s trusted benchmark in money handling, and we can train you to use it without any prior experience.
September 27, 2021

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