Payroll is often the biggest expense that organisations have to manage. And payroll costs goes beyond the monthly salaries disbursed to employees. It includes benefits, taxes, payroll platform licensing fees, and administrative costs from outsourcing payroll.
That being said, processing payroll does not have to be a headache or cost you additional yome. In order to save on time and cost, payroll processes need to be streamlined.
Why streamline payroll?
Payroll is a costly expense because of the hidden costs and complexity of processing it. By eliminating these complexities, organisations will be able to identify the lurking costs that were embedded in these complexities.
For example, engaging an external payroll vendor creates an environment for hidden costs to be tucked amidst the processing process. The vendor may be charging administrative fees each time a new employee is onboarded into the platform or when organisations request for multiple payroll reports. On the other hand, if organisations are processing their own payroll in-house, they may need to engage a payroll specialist, which inevitably translates into higher labour costs, to manage the complexities of tax processing, statutory contributions or even benefits administration.
Payroll complexities leave room for errors and inaccuracies. Streamlining payroll helps to minimise these snarky mistakes. Here’s how:
Integrate benefits and payroll into a single platform
Managing employee benefits can be tricky. With the wide array of benefits available to employees today, each customised to varying employee groups, some organisations may outsource these workflows to an external vendor to manage. This may mean using different providers to manage payroll and benefits, which runs the risk of introducing errors. Employee data across both platforms may not sync, which potentially results in pay discrepancies.
If possible, consider integrating benefits and payroll into a single platform or engage the same payroll vendors. This helps organisations to save time on running multiple payroll and benefits reports while ensuring that employee and payroll records are accurate.
Automating administrative payroll processes is the most straightforward at streamline payroll processes. However, organisations need to be mindful of the type of processes that can be streamlined and the hows, or they may risk incurring more errors and inaccuracies.
The first step is to identify which workflows can be automated. The most common payroll processes that can be automated are payroll calculations as well as employee record-keeping on the human information resource system (HRIS). Businesses can also identify organisation-specific workflows that can be automated, such as report generation, tax filings, and e-payslips.
Actively involve employees
Streamlining payroll does not solely have to fall in HR or business leaders’ shoulders. When organisations actively involve employees, this fosters an inclusive mindset among employees to continuously identify ways to streamline payroll. Some examples on which organisations can involve employees in the payroll streamlining process includes having new hires fill up the necessary onboarding forms prior to join date to facilitate payroll processing, allow employees to report their own working hours (subjected to interal approval) instead of having their manager entering individually for the entire team or conducting workforce analytics to optimise manpower and reduce unnecessary overtime.
Streamlining payroll need not be a major overhaul of the organisation’s entire payroll workflows. By identifying opportunities for improvements and enhancements in daily payroll operations, this can reduce unnecessary costs and time spent on processing payroll.