Why You Should Invest In Payroll Automation

Automation is having a positive impact on businesses of all sizes and scales. By taking mundane, repeatable tasks from human employees, automation frees up the human staff for more complex, interesting and value-adding tasks. It also helps boost morale by making the work for employees more interesting.

However, automation also requires some investment to prepare the business for it. It often involves investing in some basic technologies, and a change management programme so the employees understand what the automation will be doing, and how it affects their own work. Rather than embrace automation across the entire organisation in one go, most businesses start with one or two applications and, once the value of that has been proven, look for opportunities to automate further.

Payroll automation is an excellent candidate for any organisation that wants to dip their toe into automation.

Why payroll automation?

Payroll is a critical function of any organisation, of any size. The moment you have employees in the business, you need to have some kind of payroll process in place. At the same time, payroll is both time consuming and complex, as it has a host of taxation and expenses requirements that can end up consuming a great deal of the accountant’s time with each pay cycle.

Payroll automation is a massive time-saver. It automatically collects, organises and stores employee time and attendance data, makes deductions for taxes and benefits, and runs all the calculations without any human input.

The benefits of payroll automation

In addition to saving the time of your accounting team, payroll automation offers several benefits that ensure that the return on investment – ROI – is significant. It will save you more than it costs to set up and run.

1. Minimise mistakes. There are a lot of variables in payroll. Factors such as overtime, holiday leave, sick leave, penalty rates, expenses and more can mean that every individual’s pay can vary each week, and mistakes here can be critical, as they can result in overpayments or underpayments, and the problems associated with both.

In most cases, those mistakes are caused by human error – a miscalculation somewhere along the line that has causes the aberrant result. Payroll automation eliminates human error, making sure that the data inputted is correct and accurate, and the calculations based on that also accurate. Reporting at the other end allows the accounting team to quickly verify the accuracy of the calculations, resulting in a much quicker process for maintaining the quality and accuracy of payroll.

2. Digitise pay records. Manual bookkeeping results in massive amounts of paper printed, which needs to be kept for several years, in case it needs to be referred back to. This causes two problems – firstly, storying that amount of paperwork can be difficult and expensive, especially when office space is at a premium. Secondly, if you do need to refer back to records, having to manually sift through the paperwork is a time-consuming, inconvenient process.

One of the big benefits of automation is that it digitises all records, storing them in the cloud so they can be accessed from anywhere and at any time. The archive is also searchable, making record retrieval much quicker and saving significant time each time a record needs to be called up.

3. Better transparency. Another benefit of having an automated payroll systems is that you can provide login information to individual employees, and they can then check their own payment records, holiday leave hours, and the like. This “self-service” approach saves time across the chain, as the accounting team don’t need to spend time processing queries, and additionally provides peace of mind and transparency to the employees themselves. 

Additionally, employees that do work variable hours can see, at a glance, what income they can expect that week, fortnight or month. This actually solves a big problem as “pay day surprises”, where an employee doesn’t earn as much as they thought they would, can cause significant distress and pull-down morale across the organisation. Through payroll automation, employees can keep an eye on it themselves, so they know exactly what to expect.

4. Improved security. Another issue with keeping paper records and manual processes is that security becomes a concern. Anyone with access to the office can access such records, and for such sensitive information, this exposes the organisation to significant liability. 

Payroll automation tools are highly secure in the cloud, backed by enterprise-class technologies and encryption. This in turn allows for a significant reduction in risk of sensitive data theft within organisations of all sizes.

The ROI on payroll automation is typically so compelling that organisations use it as a stepping stone towards further automations. It’s also one of the easiest and most straightforward to deploy, with the shortest change management programme involved. Most organisations can adopt payroll automation, and have it fully tested and running smoothly within a single pay cycle, and they won’t need to bring on dedicated IT resources to deploy and manage it. In short, payroll automation is all benefits and no risk.