Payroll management is an integral part of the company’s operation and it consists of tedious tasks. But an organization must pay its employees. So processing and managing payroll accurately at the end of each month is one of the most important and difficult tasks that companies must perform.
Payroll management refers to the processes or functions by which the organization manages the financial records of the employees. Generally, payroll management is the sum of a few regulated activities that are performed one after another to calculate and generate remuneration. Employee payroll involves details like salaries, net pay, incentives, bonuses, deductions, and many other employee financial data.
Many organizations process the entire payroll or some part of it manually. But manual processing often leads to errors. In addition to that, manually processing and managing such a large amount of data is cumbersome. Many organizations choose to hire payroll professionals or accountants or they decide to outsource the payroll processing to specialized agencies. Handled in-house or outside, payroll processing needs a robust, secure, high-performance solution capable of performing payroll management activities faster and flawlessly.
Payroll software or Payroll management solutions are the applications that are utilized by the HR or payroll specialists to manage the entire payroll lifecycle of the organization. This payroll and salary calculation software must be aligned with organizational needs. A comprehensive payroll management software helps to tie up the loose ends and bring all the payroll components such as inputs, validation, processing, and checks on the same platform.
Multiple types of payroll tools and technologies are available now. But the selection of payroll processing and salary calculation software depends on the payroll processing requirement of the organization. A simple salary calculation application with payslip generator software may work for an organization, while another company may prefer a full-featured accounting software. Payroll processing uses confidential data. So payroll processing software ensures data safety and compliance. The payroll software with updated rules and policies automatically implements them while computing employee wages. Based on the employee CTC, payroll or salary calculation software can easily calculate TDS or income tax needed to be paid. Every state and region has different income tax rules and other regulations that must be followed by the payroll departments.
Before we begin with the payroll processing, let’s have a look at what features businesses should consider the most valuable in a payroll and salary management system.
- The solution must produce automated payslips.
- It must aid in the filing of tax forms.
- Software must be in compliance with existing government tax rules.
- It must be simple to connect with existing software.
- The solution should have a self-service option for employees.
- It should have the direct deposit option.
Integration and Payroll Software
Competent payroll software can gather data and perform seamlessly by integrating with other systems and applications, such as the HR system or workforce management software. It should also be integrated with relevant applications or tools such as payslip generator software, employee self-service module, etc. Generally, payroll and salary calculation software are integrated with various systems for the following purposes:
Capturing every hour of the staff time:
Hourly time-tracking software is essential for industries such as consulting, which are time-sensitive and any organization that pays on an hourly basis. Consultants, auditors, and specialist freelancing jobs, for example, may all be tracked using payroll processing software or it should be linked to the application responsible for managing it.
Managing Timekeeping and Attendance:
The program should track time, the number of hours an employee spends on his or her allotted task and it should also be able to manage work-from-home requests, extra hours, and other factors. Organizations have scheduled work hours. Based on that, it is decided if the employee will be paid for the entire day or otherwise. So time tracking and digital time-keeping applications must be integrated with payroll solutions. This feature is offered in a number of software packages and many of them also support biometric devices.
System for Managing Leaves and breaks
The payroll management salary calculation system must capture and process employee leave data and absenteeism records. The details of different types of leave such as sick leave, holidays, and paid leave must be taken into consideration before computing salary and payroll. This information is highly useful for calculating deductions and additional amounts for overtime or night shift compensation. So if another software is managing the employee leaves, the solution must be able to integrate with it to access the data.
The processed payroll data should be handed over to the accounting system which is normally in charge of issuing salaries. Employee expenses include precise payroll and other incentives that must be managed and accounted for through the accounting solution. So the accounting system must be linked with the payroll system.
Payroll Software on the Cloud
In the industry, many payroll and salary management systems are cloud-based, which means they are hosted in cloud systems. This allows payroll or salary calculation software users to access it anytime, from anywhere across the globe. Cloud solutions are also an excellent backup for physical or in-office data that is vulnerable to damage, loss, or theft. A cloud-based technology guarantees role-based data access.
The organization must select a payroll and salary calculation software that can satisfy the payroll processing needs and ease their workload. It should possess the essential features and options for customization to fulfill the changing payroll management needs.