A manual payroll system is the most challenging task when it comes to business processes. It is time-consuming and ends up taking most business hours, regardless of the number of employees. Whether you are in a small or medium business, payroll automation will make all other processes easier and very efficient. 

With automation, organizations will only focus on growth, product quality, and new business ventures. It reduces pressure when it comes to payday. How do you automate your payroll system? Let’s check some of the facts and processes.

Ideas for payroll automation

There are different ways you can automate your payroll system. You can either use the old school system, on-premise system, or even a cloud-based system, depending on your organization. The old school system uses spreadsheets to come up with payroll automation. It uses formulas, filters, and other integrations to come up with a payroll system.

With spreadsheets, you will do away with much paperwork. This process is no longer recommended since it involves manual work in some of its stages.

On-premise and cloud-based systems are the current and future solutions for payroll automation. They are always secure and customized according to your business needs. Payroll software systems can integrate with human resources software to help scale up onboarding and the payment process. They relieve the pain of conducting payrolls traditionally.

The automated systems are easier, faster, and accurate as compared to manual. You can build it from scratch or buy it from various frameworks.

A cloud-based system is like any other payroll software, as it can be used anywhere, even outside the business premises. The current trends show that the majority of payroll and HR is moving toward cloud-based solutions. However, this kind of payroll depends on internet connection and may not be viable in areas with a poor network connection. 

How to get started in payroll automation

After choosing to purchase or create your payroll software, you need to list down the features required to get incorporated into the payroll. A sound payroll system needs to deduct employee’s deductions and add their benefits automatically. 

Some of the practices you can start within your automation include:

  • Starting with a trial: this will ensure you understand how the software works.
  • Putting in the tax information and bank account: you need to incorporate the business tax information and its central bank account to ensure there is no duplication while carrying out automation processes.
  • Choose the pay period: you need to incorporate all your employees’ pay periods. Most software comes with flexible payment periods to accommodate all types of employees who get paid daily, weekly, or monthly. 
  • Have compensation insurance: some states require companies to include compensation insurance in their employees’ payrolls. If you are in such a country, you need to incorporate this into the software. 

Obstacles you might face while automating the payroll

When automating your payroll, there are three possible challenges you might face. These include:

  1. Dedicating staff and budget: some small businesses may not have an HR team, thus implementing the automation software becomes a challenge. Companies also need to incorporate the software purchase into the budget and coordinate with the HR team, which might take time. But with its advantages, it is worth it. Some software even comes with managed services and extensive support. According to accounting experts, the software helps businesses save penalties by automatically ensuring compliance and time. 
  2. Employee resistance: though not all, some employees might resist the idea of this automation process. As the business grows, automation is necessary, and it comes a time when there will be no other alternative. Companies need to inform and train their employees about the benefits of this automation. This information helps the adoption and acceptance of this automation process. 
  3. Causes fear of job security: since the software conducts all processes, some fast-growing and medium growing businesses end up focusing their energy elsewhere. This focus leaves the HR team with questions concerning their jobs. The HR team needs to understand that payroll automation makes work easier and does not replace their jobs. Companies need to assure them of their careers and have their energies focused on other processes.

When you are running an organization, your employees are the greatest assets you can ever have. It would help if you treated them well by paying their salaries on time, adding their benefits as required, and also deducting their tax obligations as required by law.

Manual payroll processes are outdated since they create errors and waste a lot of time. To avoid these and other legal cases, you need to automate your payroll system now to elevate your business or organization.