5 Tips on How to Improve your Company's Payroll Process
Payroll processing is a paradox; it is simple, but it’s also tricky and complex in some ways.
While its ease manifests in achieving the goal of payroll processing — that every employee is paid — certain complications come in when your payroll system experiences glitches. These complications can eventually mess up your bookkeeping.
Although the goal of effective payroll processing lies in timely employee payments, streamlining a few aspects of a company’s payroll process paves the way for payroll process optimization: ensuring accurate and efficient payroll process. Now the question is, how do we go about optimizing your current payroll process?
Optimizing payroll processing
The use of online payroll system effectively streamlines your payroll process, but acquiring a state-of-the-art online payroll system is not enough. You still have to integrate it with your accounting system to maximize your investment to make the entire payroll process more efficient. Once merged, you can review reports for preliminary payroll register, sorted lists of paid wages, and payroll expense trend lines, as they indicate data entry errors and fraud.
Minimizing Pay Cycles
Minimizing pay cycles equates to minimizing errors in payroll processing. Chances are, when you have different pay schedules for management (monthly) and part-time employees (bi-weekly), duplication of multiple processes can happen, which will most likely have a negative effect on employee satisfaction. To avoid this, choose only one pay schedule for everybody; this way, the payroll department can move on to other tasks after the payroll processing.
Issuing of Management Reports
Once you lock down the payroll period, you can prepare management reports to prevent fraud due to unauthorized changes and to ensure everything has been paid for the current cycle. Also, using reports such as trend lines of overtime per employee and trend lines of compensation expenses per department ensures foresight in decision-making – and ultimately, a smoother business cash flow.
Outsourcing your Payroll
Admittedly, it could be a bit costly to get a state-of-the-art payroll system or have an in-house payroll department. Fortunately, a cost-effective alternative exists in the form of payroll outsourcing. It may be a smart move for your company, since most third-party providers give a tax guarantee that can save you from paying penalties when errors are incurred. More importantly, you can utilize the expertise of these firms in terms of bookkeeping, accounting, and payroll knowledge to ensure correct payroll entries and budget.
Payroll issues can be quite a nightmare and may be a major source of stress for everyone, especially yourself. Don’t worry, though. Simply follow these tips, and you’ll keep the interests of both your employees and your company in mind as you maximize your profit while prioritizing a speedy and accurate wage release for your employees.
Read Next: Is Payroll Outsourcing For You?
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This post was first published on 6 October 2014 and edited 28 July 2023. Edited by: Aly Tagamolila