Introduction

No matter how big or small the organization, there’s no way around payroll. Calculating wages and salaries and paying employees for their work is a process every business needs to undertake. But since payroll is so complex and time-consuming, it’s definitely not everyone’s favorite task.

While there’s no way to avoid payroll, businesses can significantly reduce the complexity and workload behind it by automating their processes and shifting their operations to cloud based systems. Let’s take a look at what payroll automation is, how it works, and how businesses can benefit from putting their payroll operations on autopilot.

What is payroll automation?

Payroll automation is the process of eliminating manual tasks from the payroll process. This is achieved through the use of payroll automation software and modern technology which reduce the need for human intervention in payroll to a minimum.

An automated payroll system can carry out processes like calculating gross and net pay, determining the amount of payroll taxes to be withheld, gathering the data needed for payroll, issuing payments to employees, creating payroll records, and more.

Automation is the use of technology to carry out processes with minimal human assistance and storing them on cloud softwares.  Automating payroll means streamlining all the processes linked to payroll management and processing as well as the processes around employee payments.

Why should a business opt for cloud payroll and payroll automation?

The fact alone that payroll automation software takes over mind-numbing manual tasks like entering employee hours and overtime is a great selling point to switch to automated payroll processes. At the same time, such a software also removes the hassle of this information existing loosely, it manages over a cloud payroll system that stores and processes the information in most transparent ways.

But there are even more advantages that make investing into an automated payroll software a no-brainer. They include efficiency gains, increased productivity, and enhanced profitability. 

When the employee base is scattered around the world and payroll systems get complex with currencies and transfers to deal with, Transfi comes in with its global payroll solutions providing coming of age payroll automation and cloud setup for easing out your payroll management requirements. 

1. Payroll automation helps streamline workflows

Payroll automation creates a system within the organization which brings together all branches associated with payrolls connected loosely with each other. It streamlines the processes into tenures and cycles making it regulated for the organisation to have a complete control and intervention when required, otherwise handling the process entirely on its own in a smooth manner.

In businesses dealing with employees all over the world, it's important to streamline the payroll in terms of currency, regulations and compliances. A cloud based payroll automation platform like Transfi helps do the same in easy and quick steps. 

2. Payroll automation reduces errors

Automating payroll is a great way to eliminate payroll errors. Especially when working with spreadsheets and important information that is distributed across many different files and systems, a small mistake can result in many hours of extra work—not to mention the stress and headache it causes.

Automated payroll systems prevent mistakes from happening and allow businesses to change and update their data in one centralized database. Depending on the software, employees will even be able to update their personal information themselves via self-service functions.

3. Payroll automation enhances compliance

Apart from preventing operational errors which often result in countless hours being wasted on correcting said errors, automating payroll also helps businesses enhance their payroll compliance. That’s because payroll errors not only take a lot of time to correct, but they also pose significant compliance risks.

If payroll calculations are incorrect, this means that the amount of payroll taxes withheld from employee earnings is not correct, the currency conversions and the final payoffs are also faulty. As a result, the business’s statutory payroll reporting will not be accurate, which can lead to compliance fines imposed by the competent statutory authorities.

4. Payroll automation saves time (and money)

The use of software makes payroll calculations and processes faster than ever before. What’s more, automated payroll systems free up time for HR and payroll managers to focus on more important tasks such as employee happiness, talent recruitment, onboarding, and creating a welcoming and positive workplace experience.

This increased process efficiency and productivity reduces operating costs. Plus, it can free up as much as three to five extra hours of work to be spent on different tasks.

5. Payroll automation increases security

Employee payroll data is confidential information that should be kept safe and protected from unauthorized access. Printed spreadsheets and physical copies of payment details and other sensitive information pose a security risk that can easily be avoided by digitized, automated payroll processes.

Payroll software typically uses encryption to ensure confidential data is protected at all times. It also helps track important payroll processes and store tax-relevant details in a compliant way so that the organization is well-prepared for potential audits at any given moment.

6. Payroll automation makes payroll easier to handle

Managing payroll is incredibly complex, and there are numerous payroll functions that need to be taken care of. Automating large parts of the payroll process reduces the amount of tasks that have to be handled individually, which makes managing payroll a lot easier on an overall level.

Thanks to payroll automation, organizations can calculate payroll taxes, export data, and generate reports on workforce costs, employee productivity, and more in an efficient way. Automation also makes data management in payroll a lot easier since it enhances the transparency and accessibility of the data.

7. Payroll automation enables businesses to scale

Automating payroll processes is a key prerequisite for scaling a business’s payroll operations. Manual processes are not suitable for sustaining business growth in the long term.

As a business grows, the payroll process needs to be adjusted to accommodate for increasing volumes of payroll data and growing headcount. Automating payroll processes is the only way for businesses to build a payroll system that is designed to support business growth.

8. Payroll automation helps businesses prepare for the future

Payroll automation is an important component of digital transformation which, in turn, is crucial for businesses to prepare for the future of payroll. An automated payroll is more resilient and efficient than manual processes, which is a key requirement in the digital era.

In a fast-paced business environment that is characterized by increasingly high expectations surrounding efficiency, productivity, and profitability, payroll transformation is what it takes to future-proof operations and respond to ever-increasing demands.

9. Payroll automation improves reporting and analysis

Payroll data is an important source of information for businesses. A major advantage of digitizing payroll is that it comes with the standardization and consolidation of all the data related to payroll and its processes. This helps businesses make informed decisions and analyse past activity better to mould their operations in the right directions to help the business with an upward graph.

Moving towards payroll digitisation and cloud payroll

Digitization is changing the way businesses operate. From communication to supply chain management to HR, the rise of digitized processes is palpable across all business functions. This includes the way businesses manage their payroll.

Digital transformation is slowly but surely making its way into the payroll department. New technologies and digital processes are revolutionizing the way payroll teams operate.

Conventional, often manual payroll processes are being replaced by payroll software. Paper payroll records are being digitized, and payroll processes and systems are being shifted to the cloud.

Conclusion 

Digitization and technology are two major drivers of operational efficiency across all business functions, including the payroll department. Organizations of any size can realize significant efficiency gains through payroll automation and payroll technology. However, the effects are even greater for international organizations with a multi-country payroll.

Global payroll is notoriously complex, especially when it involves multiple in-country payroll providers. While outsourcing payroll to local service providers enhances global payroll compliance, multi-vendor management brings a whole new set of challenges.

The main global payroll challenges faced by organizations with globally distributed teams include fragmented, non-standardized payroll data, lack of operational visibility, and manual data handling. A global payroll solution like Transfi can help businesses overcome these challenges.

Transfi’s Global Payroll Consolidation Platform is built for seamless global payroll management. Automate, standardize, and consolidate payroll data for different entities and payroll providers and use our powerful analytics tools to slice and dice your data for detailed insights into your global workforce costs.

Frequently asked questions (FAQs)

1. What is payroll automation?

Payroll automation is the process of eliminating manual tasks from the payroll process. This is achieved through the use of payroll automation software and modern technology which reduce the need for human intervention in payroll to a minimum.

2. How to automate payroll?

There are many different aspects to consider when selecting a software solution for payroll (e.g. user-friendliness, scalability, security, and more), but in order to achieve the highest level of automation, there are two aspects which are absolutely crucial.

• Payroll software integrations: The more workforce management tools can be integrated with the payroll software, the more processes linked to payroll can be streamlined and automated.
• Software capabilities and features: If the objective is to automate as many payroll processes as possible, the chosen software should come with many different capabilities and features.

After deciding on a software solution, the organization can proceed to feed their data into the system, train employees on how to use the new system, and implement its new automated payroll processes.

3. How Payroll automation makes payroll easier to handle?

Managing payroll is incredibly complex, and there are numerous payroll functions that need to be taken care of. Automating large parts of the payroll process reduces the amount of tasks that have to be handled individually, which makes managing payroll a lot easier on an overall level.

4. What are the benefits of payroll automation?

• Payroll automation helps streamline workflows
• Payroll automation reduces errors
• Payroll automation enhances compliance
• Payroll automation saves time (and money)
• Payroll automation increases security
• Payroll automation makes payroll easier to handle
• Payroll automation enables businesses to scale
• Payroll automation helps businesses prepare for the future
• Payroll automation improves reporting and analysis

5. What does it mean to go digital in payroll?

Digital payroll is the modern way of payroll processing. Here are different steps you can take to modernize your payroll:

• Digitizing payroll and employee records,
• Adopting digital payment methods,
• Using online time-tracking tools,
• Generating and distributing payslips electronically,
• Making payroll information and records accessible online,
• Using modern payroll management software (like Transfi)
• Automating payroll processes and data flows.