Most common difficulties in calculating payroll manually
We know how much this can be painful for an organization's human resources and finance teams. It takes a lot of hard work, time and dedicated effort to make payroll a success every month. And that goes for companies that still go the manual route in 2017. The transition from a manual paper-based payroll system to a cloud-based payroll system is still being discussed by executives in several companies.
However, change is slow and gradual. A manual approach to payroll is not only cumbersome, but it is also the greatest risk of human error. Security is also the most critical issue here, as payroll contains critical information, which becomes a challenge when outsourcing to third-party service providers. Today’s enterprise market is extremely competitive and companies must always be one step ahead of their competitors to have an advantage over others. Your pursuit of business excellence can be made possible through a centralized, standardized payroll process. Powerful payroll software allows the department or personnel manager to manage payroll smoothly and error-free, excluding payroll risks.
Here are some of the biggest challenges of manual payroll processing, which can be a huge burden on businesses:
For all companies that run their payroll processes manually, this means great frustration with manual interventions. A manual payroll system overloads the HR and finance teams with daily activities such as documentation and repeated cross-checks. It is also very subject to human error, which can result in obsolete or incorrect payments. Some employees may have complicated salary structures that must be compensated for their accuracy. Another margin of human error arises when sheets are miscalculated.
Manual payroll requires special attention to make significant changes to the law. If you do not comply with any of these laws, you can expect heavy fines or penalties for non-compliance. The legal requirements for Indian payroll are diverse, such as minimum wage, TDS deduction, ESI results, FP deduction, tip, EDLI and more. Each of these points requires special attention. Keeping up with all the rules and regulations takes a long time, but it is a critical task that is usually left at the end of the road.
Manual monthly administration and vacation calculation for each employee are part of payroll accounting. This is subject to major errors and is time-consuming. Stacks of documents consisting of manual assistance and time recording are inefficient and frustrating to follow. A miscalculation can result in employees getting less or more than they really deserve. This can be unfair and contribute to reduced employee satisfaction.
In legacy accounting systems, employee data, such as leaves, reimbursements, overtime accounts, and others, is usually entered manually or uploaded. Excel spreadsheets with complete data require a lot of management. Even a small change in a formula can interrupt complex calculations and result in incorrect payments. This repetitive system is cumbersome and leads to inefficient use of resources. Ultimately, employees spend valuable time on daily tasks that can affect their productivity and morale.
Maintaining critical employee data on paper or in Excel spreadsheets is by no means certain. Employees expect a lot from your company and ensuring the security of critical employee information is key. Manual payroll processing ensures that the amount of information that falls into the hands of the wrong person is high. This loss of information can be detrimental to businesses.
All of these challenges can be solved by moving to competency-based payroll software that is secure, easy to use, and ensures strict compliance. It also saves a lot of time and money that would otherwise be spent on manual processing.
IceHrm is a Human resource management system for small and medium-sized organizations. This HRM software centralizes employee data and allows only one authorized person to access it, providing a high level of security. The presence module monitors employee time based on information about insertion and perforation. It covers all the basic HRM needs of a company such as Time Management, Attendance Management, Expense management, leave management, Recruitment management and handling employee information.
Key Features of IceHrm
Unlike the other popular HRM software, you can use one system for all HRM functions. As the other HRM software tools are designed for specific HRM functions separately, using IceHrm will benefit you to utilize all HRM functions in one software. There are three different editions in IceHrm. Each edition has different features. You have a choice to select which edition will suit your organization according to your HR requirements in the organization. Also, you can purchase the IceHrm software based on the number of employees in your organization.