The Benefits of Automated Payroll [2020]

By: Yara Pollard

If you’ve done payroll before, you know just how labor intensive, time consuming and mentally demanding the job can be. Moreover, making even a simple mistake can create a lot of financial damage to the organization.

It’s an essential but high-risk job to keep a company running. After all, part of the payroll process is distributing payment for the workers. With advancement of modern technology, we now have ways to automate payroll and the benefits of automated payroll include decreasing to eliminating errors.

To give you a better understanding of just how grave errors done on payroll can be, here are some of the common payroll mistakes:

  1. Not saving payroll records
  2. Not maintaining confidentiality
  3. Not having someone else to handle payroll if the worker responsible is away or gets sick.
  4. Missed deadlines
  5. Classifying employees wrongly
  6. Bad record keeping and data entry
  7. Poor handling of garnishments, levies and child support
  8. Wrong calculation of overtime pay

Those are not even all of it. However, just with what’s mentioned in the list, you can begin to see the high risk involved in doing the payroll. Here are more information regarding payroll errors:

  • According to the IRS, 33% of employers make payroll mistakes costing billions of dollars each year.
  • The American Payroll Association has shown that there’s an error rate of 1-8% of total payroll in organizations that make use of traditional time cards.
  • They also showed that an average of $845 each year is the result of IRS penalties because of poor payroll process management. 

Having an automated payroll system eliminates most, if not all of these problems. Here’s everything you need to know about the benefits of having automated payroll:

More Accurate Timekeeping

With doing timekeeping in a manual fashion, there can be a lot of chances for creating mistakes as clock data and wages are calculated by hand. Editing or adding entries can also be much harder as the person in charge still has to sift through the records.

With an automated payroll system, all data can just be imported into the automated payroll software. This means that total work hours and salary are calculated by the system and this calculation is accurate based on the data contributed by the workers.

If edits need to be done such as when employees forget to clock in, the changes can be done with ease. 

Easier and Faster Calculation

More than collecting and gathering data, computations are done by the automated payroll system as well. Instead of still having to make use of spreadsheets and writing out checks by hand, the system does this for the organization.

In a more manual setup, the person responsible for payroll can have a challenging time even with a small number of workers. Moreover, tax rules and regulation can change often and this just makes it more difficult to do the payroll.

With an automated payroll system, troubles with tax codes can be a thing of the past. It’s integrated into the system which means there’s less chance for errors that can result in penalties from the state taxation agency and the IRS.

Easier to Make Changes

There are more other types of changes that’s part of the payroll system other than clock data and tax codes. Before even being part of the payroll system, employees still have to fill up a paper form if the process is done in a manual scenario.

After which, they have to wait for the process to finish and get their form returned. With an automated process, employees can do their entry in the system in a direct manner online. This means that changes such as adding new employees can be hassle-free.

These are other changes that can be done with ease through an automated payroll software:

  • Updating W4 information
  • Changing or adding bank accounts
  • Printing W-2 forms

Assists in Financial Planning

Since automated payroll systems allow for on-schedule payments, employers can do budgeting in a more effective manner. Moreover, as employees know when to expect their payments, they too, can better budget their money. 

With this, there’s better trust between the employer and the employees. This improves employee satisfaction, morale, retention and engagement. 

The Best Payroll Software Solutions in 2020

Looking for the best system to automate the payroll process of your company can be a daunting task if you don’t know much yet about the softwares. 

There are a lot of payroll softwares on the market but to narrow down your options, we’ve done the research for you and compiled the 6 best payroll software solutions in 2020 that can be ideal for your organization:

  1. GoCo
  2. Intuit Quickbooks Payroll Software
  3. Gusto Online Payroll Software
  4. Patriot Software
  5. Automatic Data Processing (ADP)
  6. Xero Software

If you believe that the payroll process of your company needs an upgrade, decide to make use of an automated payroll software. The benefits of automated payroll can be just what your company needs to level up.

According to Syndeo, because of the benefits of automated payroll, “it’s no surprise that so many businesses are choosing payroll automation.” Don’t get left behind. Strive to implement an automated payroll system in your organization.

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