The Ultimate Guide to Maximizing Payroll Process to Support Business Growth

Every business, small or large, handles payroll in its own way. Payroll governs how a business handles payments to employees and contract staff (freelancers), ensuring that every pay, tax bill, invoices, and data input aligns with the compliance laws.

With the compliance and tax laws,   changing from time to time, the payroll is faced with many complex procedures, ranging from difficult processes, more data to more efforts to the extent that they’re now better addressed with payroll software as the BMAC Human Resources Management Services (HRMS) and a focus on hiring a bigger talent pool as the SSAC Advisory and Professionals.

Many HR professionals are always exploring the world for talented recruits, technicalities, but payroll management has remained an impediment that businesses have kept struggling to overcome.

Calculating payroll and distributing salaries may appear to be a simple task, but it’s not as HR professionals running the payrolls are usually faced with several difficulties.

Recognizing payroll processing challenges is the first step towards identifying appropriate solutions to overcome them, being very important to get your payroll right as paying employees incorrectly or untimely stands to hurt their morale, just as failure to comply with tax or labor laws can result in severe penalties.

Steps Involved in Payroll Management Process

Payroll management determines employee pay, deductions, tax computations, bonuses, and compliance, among others.

• The first step involves establishing a payroll policy, which requires that you fix your payroll processing norms, including guidelines for leave, attendance, and compensation.
• The second step demands that you keep an eye on your various departments’ contributions. For example, attendance records, tax requirements, leave records, and so forth.
• Data gathered for payroll processing, you check for accuracy and legitimacy to keep you abreast for instance with the exact amount of unpaid leaves taken by an employee.
• That done, run payroll calculations, including deductions and taxes. Payroll management calculations are done, ensuring statutory compliance.
• Payroll completed, you enter everything into an accounting software of the BMAC Accounting sort for precise accounting and administration.
• You then move to distribute payments to employees and provide them with payslips, stridently keeping track of employee account information.
• Finally, keep track of inaccuracies and other errors to improve your future payroll structure, bearing in mind that the payroll management process is time-consuming and inconvenient.

But notwithstanding all of the above you have succinctly put in place, payroll processing is ever without very significant challenges like the following:

• Statutory Compliance & Legislation Issues as running a company isn’t a cakewalk.
• Staying compliant is one of the biggest challenges of payroll processing. Labour laws, state regulations, and statutory compliances are only a few of the legislation and rules that exist. Following these laws is not an option, but it’s necessary.
• On the other hand, making compliance mistakes isn’t necessarily a decision; many people simply don’t understand intricate regulations and they get revised from time to time and attract significant fines and penalties for their companies.
• Furthermore, most businesses rely on conducting payroll manually or entrusting the task to their HR staff. But no matter how much time you devote to learning the compliance regulations, they stand to change, take you back to square one, and pose a challenge that would end up causing major distractions in the process of payroll generation.
• Evolution of Technology: The blind trust in technology can end up becoming one of the biggest global payroll challenges to bed face. Chances are that the blind faith in this can turn out to be faulty in the course of time. This is where we turn out to be wrong and not on the correct path. Technology does make the process of payroll generation easy and a lot streamlined but may not necessarily be accurate all the time.
• Good and effective payroll software as the BMAC HRMS does have the capability to alleviate the issues many face over their payroll management process but it is important that you take on and trust the right technology of capacity, efficiency, and effectiveness. Every single prospect of a payroll service provider should be wholly verified to avoid any further risks.
• Need for Higher Flexibility: Payroll management is not restricted to merely paying off your workforce. COVID-19 has caused significant changes for several businesses, necessitating increased flexibility. For instance, a company may have reduced or modified its work shifts, necessitating frequent and major changes to employees’ schedules, influencing leave, payroll, and other operations to coordinate and compute overtime and other payouts. Businesses are evolving daily and are reinventing entire product lines due to changing market demands. This involves dealing with a lot of important tasks and leaving almost no time to get caught up in payroll-related challenges.  Many businesses have also been forced to deal with remote work, which necessitates coordinating schedules and remote payroll management across multiple locations. There are no easy ways to avoid these payroll and compliance challenges, using the manual payroll process. However, using an automated payroll management system can help you overcome these difficulties easily.
• Shortage of Payroll Professionals: The payroll industry recently experienced a booming increase in their demand and popularity. The last few years are what has boosted the overall growth of the industry. This is the reason why demand and supply are posing a problem altogether. The year 2021, in terms of payroll challenges, experienced a shortage in the number of talented professionals in the field. Finding well-equipped and well trained and experienced payroll professionals may well turn out a problem this year. But, the same can also be mitigated effectively owing to the kind of growth it has gained and continued to gain over the years.
• Challenges in Attendance & Leave Management: Employee attendance is frequently tracked and time-stamped by card swipe, finger-print punches in/out, or simply by ‘signing in’ one’s name on a worksheet with manual payroll processing. To calculate the pay and other incentives, that ‘data’ must be carefully duplicated, imported, or exported and passed around teams before making it authorized. Managerial permissions and modifications are sometimes required. Because of the mountain of paperwork and individuals involved, this simple daily operation takes a lot of time and effort, so errors and inconsistencies are common.
• Challenges in Handling Remote Work: With so many employees working remotely from home or even overseas during COVID-19, traditional HR and payroll administration is nearly impossible.
• Card readers and sign-in forms are ineffective for attendance management. Hard copy management of leave and compensation is no longer possible. Email processing could be chaotic due to the numerous submissions, manager approvals, verifications, and necessary coordination.
• Furthermore, with the pandemic persisting, the typical onboarding and off-boarding process, involving many documentation and face-to-face meetings, is no longer feasible.
• In such circumstances, a system that can automate remote attendance, leave requests, performance management, training, and other HR and payroll operations is more important than ever.
• Consistent Automation: Automation is taking the world by a whirlwind. While the same might be an amazing addition to the overall prospects of growth and development, the same also became a potent challenge for the overall global payroll system in the year 2021. Automation might enhance the payroll management process so much that it could become a lot harder to come up with the pace of it with manual inputs. The capabilities and workforce implemented by the automation are also going to undergo a rapid change and evolution, which might further end up contributing to the overall payroll system even further. It is a wrong notion that the inclusion of automation is going to end up making manual labor redundant. That is not going to be the case. Rather, the same is believed to impact the overall growth in the end but the initial impacts might impose a bit of challenge for the people working in the payroll industry.
• Threat to Data Security: With the ever-growing realms of technology, the number of threats and risks are on the rise as well. It is not surprising that more and more people are finding it hard to keep their data and information encrypted and safe. The same does go out to the payroll industry as well. The kind of threats to the stored information is not necessarily new. More and more reports of cybercrimes and cyber breaches are on the rise and the same might inflict impacts on the overall prospects of the payroll industry as well. The payroll industry and the data associated with it might be on the risks and that is expected to stand out as one of the possible challenges this year. That being said, the security is also strengthened and that itself could turn out to be quite beneficial on the whole as well.
• Inconsistency in Policies: Company processes and policies can be changed a number of times, an act that can turn out one of the most common challenges faced by the payroll industry. Given the fact that this relies on the right in the moment and current and updated information to be relayed to the employees, it is not surprising that the same might end up being a challenge in the coming few months. Companies and organizations are constantly changing their processes and policies. Though they might be a good thing for any company that does that, but the consistent changes might turn out into trouble for the professionals under the payroll industry. If you are someone willing under this similar situation, be assured to stay in consistent sync with the companies you are working along with. This will help in keeping track of the changes and accordingly make the necessary changes.
• Challenges in Payroll Computation: Continuous use of excel sheets by small and medium-sized businesses to manage payroll-related data results in several issues, including:
  • Incorrect payments, resulting from data entry errors and rule misapplication.
  • Difficulty in managing HR and tax audits because of the way data is dispersed.
  • Difficulty in handling and accessing Payroll records.
  • Difficulty by approval managers to comprehend filed information.
  • Difficulty in compiling and preparing reference statistics and reports for high management. There is even the possibility that even businesses that are using payroll management software are using unproductive outdated versions, lacking features critical to increasing efficiency.
• Some of the drawbacks of older software applications are as follows:
  • Not tailored to the company’s operations, rules, and requirements
  • Other HR information and tools, such as attendance, leave, claims, employee benefits, and so on, are not interconnected.
  • Does not automatically adapt to the frequency of statutory updates.

How Best to Overcome the Payroll Challenges

The Payroll industry is a very dynamic one with consistent updates and changes. While payroll is currently gaining popularity, there are fears that the coming months could turn into some quite extensive obstacles and challenges.

Payroll processing is not a simple task that can be handled manually by one person without hassles. A series of challenges impact your accuracy and compliance structure and expose you to non-compliance penalties. They are, however, not difficult to eliminate, engaging the most appealing measures lately.

Minimizing them by using a good payroll management software such as the BMAC HRMS, which handles with ease the constantly evolving intricacies of the payroll.

But realizing that the pressures involved in payroll processing, payroll tax filings, tracking paid time off, and others yearly, bringing in a payroll management company to help a business owner with all of the routine headaches, and keep business on top of a quickly evolving workforce could be more plausible.

SSAC Advisory and Professionals, a consultancy arm of the respected firm of Chartered Accountants, S.S. Afemikhe & Co. established in 1986, best suits that role for any business.

A multidisciplinary company with over 36 years of experience in providing efficient and effective value-adding consultancy services, SSAC helps to identify payroll challenges and design a tailored payroll process that could fit your needs and reach your objectives. Managing efficiently and keeping your payroll operations with strict confidentiality, it initially registers your business as an employer, ensures your regulatory compliance and registration of employees, works out payments due to employees and tax authorities and provide tailor-made reports and employee payslips, and ensure that you stay organized

Proper payroll organization begins with effective systems and processes for managing tasks, responsibilities, and deadlines. This can include software tools for managing various types of information, detailed filing systems—electronic and physical, avoiding clutter, and disposing of out-of-date items. Fulfilling the payroll requirements for Paycheque Protection and Programme loans also require a great deal of organization and additional documentation.

Handling payroll in-house from all of the above can be more expensive than outsourcing it. SSAC has the experience and tools you need to organize all your payroll requirements from the very beginning.

It helps to define and document processes, knowing that having a solid awareness of your payroll process is critical and clear documentation of your process is also important in case there are any questions or concerns from employees or stakeholders.

And with the shift lately to remote work due to the pandemic, developing flexible payroll processes is more important than ever as having a good system will keep things from falling apart when things change or something goes wrong. Documenting your process is also helpful in the event of an audit.

How do you go about it, where do you start from and what should you include?

SSAC helps to eliminate any guesswork of developing an effective payroll process that works for your business, helps to establish discipline, manage expectations and maintain accountability.

Companies dream of error-free and effective payroll management but they are often easier said than done. SSAC carefully helps to manage expectations about how payroll works and with payroll rules and guidelines in place and properly communicated, it’s important that employers make sure that management and staff are accountable to the process.

A payroll management service firm as the SSAC limits a business’s legal liability as it ensures that all labor and tax laws are correctly followed, attention is paid to details, and payrolls are correctly processed.

As a payroll management company that knows the ins and outs of every aspect of the job, it helps to minimize liability and maximize the payroll process to support business growth.

From the proper classification of employees, tax regulations and exceptions to knowing and understanding labor laws, outsourcing your payroll ensure you don’t miss important details that keep you in compliance and remain penalty-free. It can be difficult for a pressured HR department to keep the small details in-laws straight in different states, but SSAC, a payroll management company, has a whole team dedicated to the details. The company adapts with you as your business grows or as laws change.

No two businesses are the same, and payroll is not a one-size-fits-all endeavor. If you’re wondering how to choose a payroll service provider, SSAC is one that understands your organizational goals, company culture, and best industry practices when deciding how best to approach and manage payroll. The right choices can positively influence whether payroll is completed on time and with accuracy, efficiency, and effectiveness.

Most entrepreneurs don’t go into business with the goal of spending their time processing payroll. If you’re like them, you’d probably rather focus on keeping your products or services competitive and your clients happy.