How Payroll Technology Can Improve the Bottom Line
How Payroll Technology Can Improve the Bottom Line
Payroll is a necessary function that all businesses with employees must complete on a regular basis. While required, it is often a slow, painful process that requires the apt attention of one or more members of your time for an extended amount of time each payroll period. More than that, the process has numerous expenses that may be eroding away your bottom line. The use of payroll technology in your payroll processing efforts can be effective at generating financial savings in your organization in numerous ways. If you are looking for exceptional ways to reduce overhead through your operational activities, consider how the implementation of new payroll technology in your organization can save money in each of these ways.
Save Time With All Aspects of Payroll Processing
Payroll processing may take your team much longer than necessary when you do not have the right software program in use. In fact, you may have several employees on staff that do little besides processing payroll regularly. The right software program can dramatically reduce the amount of time and effort required to complete this task, saving you money through a reduction in overhead. Technology can be used to automate paycheck adjustments, tax withholdings, benefits deductions, check printing, payroll deposits and more. If you are not using payroll technology to facilitate your payroll processing efforts, there is a good chance that you are wasting costly time through manual efforts in each of these areas. In fact, you may be able to eliminate one or more positions in your HR department through the implementation of the right technological solution.
Eliminating Costly Mistakes
When payroll is processed manually, there is always a risk of human error. Very few people are so detail-oriented that they will never make a mistake when processing payroll. In the best case scenario, your employees may alert you to a mistake that was made and may allow you to adjust this error on their next paycheck. Correcting mistakes can cost your company money through the time and effort spent on corrections. In addition, when errors are not caught, they can result in unnecessary financial loss. Errors can also be made on benefits or tax withholdings. When these are not caught immediately, the result can be devastating for the business, the employees or both. Because payroll technology automates the payroll process, errors in calculations are rarely made. In addition, some software programs are intelligent and may flag a number that appears to be grossly in error, allowing you to adjust the number before paychecks are processed.
Decreasing the Need for Expensive Supplies
Payroll technology allows you to automate many aspects of payroll processing. This includes eliminating the need to manually write or print checks through direct deposit. Because adjustments to paychecks can be recorded online by staff or managers, there is not a paper trail regarding adjustments to sick time, paid time off and more. The elimination of these manual processes means that your office will use significantly less paper, fewer checks and much less toner or ink. If you pass out paper checks in your office currently, you may also eliminate the cost of envelopes that are used with this process. The cost of these supplies can add up over the course of a year. In addition to saving money in these areas, you also will reduce wear and tear on printers, enabling you to get more use out of your equipment investment.
Improving the Tax Filing Process
The tax process for the HR department can be just as time-consuming as processing payroll. Each pay period, taxes will need to be withheld, and records will need to be kept of the withholdings for each individual staff member. Records regarding benefits and retirement account deposits also must be maintained. Quarterly filings need to made to the IRS, adding to the paperwork burden. In addition, your office must process W-2s at the end of the tax year as well as prepare your own business tax return. Both the record keeping aspect of the tax process as well as actually completing the filings takes time and energy. It also may take a considerable amount of supplies to complete all aspects of the tax preparation and filing process. When you automate the process, you can save time and energy, reduce the need for expensive supplies and even decrease the risk associated with making costly mistakes on your taxes or your employees’ tax records.
Decreasing Liability Risk
Your HR department is directly responsible for complying with many aspects of employment and tax laws, and their inability to focus their full attention on these tasks and to complete them accurately creates a huge liability for the company. Consider, for example, that your HR team must accurately withhold taxes, track those withholdings and report them to the IRS for each employee. They must also keep records regarding health care benefits that each employee received and report this to the government. In addition, the HR team manages and processes retirement benefits for your employees. In the event there is an error with any of these critical tasks, your company is exposed to a potential lawsuit by various parties. The legal fees that you face with a frivolous or legitimate lawsuit alike can be substantial, and the expense mounts if you lose the case. When you automate various HR tasks, you reduce the likelihood of human error and ensure that these tasks are completely in a timely manner. This dramatically reduces the liability risk your company faces through HR activities.
Savvy business owners and managers always keep an eye trained on their bottom line. It may be easy to overlook the expenses related to your HR activities because these are perceived as required costs of operation. However, you can see that you can drastically reduce many HR expenses when you automate specific payroll tasks. You can begin exploring payroll processing technology to day as a first step toward reducing overhead and other expenses in this area. By doing so, you can implement the technology for significant savings going forward.