By streamlining and simplifying payroll processing, organisations can improve its accuracy and efficiency.
Today, a growing number of companies now track the accuracy and efficiency of their payroll process by applying various payroll strategies, most of which include the use of new cloud-based systems.
A 2019 survey by Deloitte showed that the number of organisations that track payroll KPIs increased from 62% (in 2018) to 91%. According to Bloomberg Tax, 85% of organisations now track accuracy and efficiency, 89% track payment errors, and 54% track the number of days to resolve payroll errors.
This attention to detail when it comes to measuring the accuracy and efficiency of payroll management is essential to improve it. And that improvement must begin with a commitment to streamlining and simplifying the overall payroll process.
According to Insights for Professionals, an online resource for HR, IT, and marketing professionals, an overly complex payroll process is more liable to payroll errors and these errors “can put you at risk of non-compliance with tax regulations or damage workplace morale if people are paid late or incorrectly.” Consequently, the way to minimise errors and improve efficiency is to “streamline and optimise the entire process.”
In this article, we’ll consider eight payroll strategies you can use to streamline and simplify your payroll process to make it more efficient.
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1. Use a cloud-based system to centralise and digitise payroll records
Keeping payroll records (including payslips, salary information file, among others) is essential for accounting and legal purposes.
While the accounting department needs them to prepare financial statements, the legal team might also require them in the event that a worker or ex-worker is taking legal action or a government agency is auditing.
Paper records are inefficient because they consume space and are also liable to getting lost. While keeping digital records solves the space problem, it does not solve the recoverability problem. Laptops and phones can get infected with viruses and everything on them can get lost.
Therefore, a better approach, especially in a world where concerns about cybersecurity is rife, is to keep these records on a cloud-based storage system where they are safe and can be easily accessed.
“Payroll and employee records deal with very sensitive information and each business has a responsibility to ensure they protect these records,” said Asset College, Australia. And the way to achieve the safekeeping of these records is “using a cloud payroll system.”
In addition to safety, a centralized and digitised cloud-based storage of payroll records will reduce cost (no need to employ someone to keep physical records or digital copies) and save time (records can be easily accessed on the cloud).
2. Use integrated payment scheduling
An integrated payment schedule – where employees receive their wages and salaries on the same day – can be more efficient and beneficial to organisations.
Organisations that incur costs on transferring wages and salaries to their employees based on how many times they make such payments can reduce the total cost by streamlining the payment system.
For example, under the UAE’s Wage Protection System (WPS) many WPS agents charge employers by the number of times they make WPS payments. In this case, it is more cost-effective to pay all workers at the same time (e.g., wages on the last day of the week and salaries on the last day of the month).
Even when paying multiple times does not cost extra money (as with NOW Money), it will still likely save a lot of time to pay everyone at once.
3. Streamline how employees receive wages and salaries
One of the ways to cut the costs associated with paying wages and salaries is for employers and employees to use the same banking solution – the former for paying and the latter for receiving.
For example, NOW Money, a digital payroll platform, also has a mobile banking solution where employees of companies can open a mobile bank account into which they receive their salaries.
While this provides many benefits to employees, it also helps employers reduce the cost of paying since they can freely transfer money from one NOW Money account (the employer’s) to another (the employees’).
Though the cost of transferring money to one employee might look insignificant, paying multiple employees every week or month can quickly lead to a significant transaction expense. For companies with a global payroll, this can become even more significant to the bottom line.
In addition to cost, it simplifies the whole payment process, making it less cumbersome and time-consuming.
4. Employ automation
An automated payroll process will reduce the number of workers needed in the payroll department.
Also, it will help employers save time as activities that take payroll professionals hours can now be completed in seconds or minutes.
Furthermore, automation reduces the risk of human error. This is why it is one of the risk management strategies in payroll that many organisations have found the most beneficial.
Automation is also inherently connected to the digitising of payroll records. The more automation an organisation employs, the more it can create safe and easily accessible digital records.
5. Streamline compliance with regulations
Compliance has always been one of the top challenges of payroll management. However, it’s not just about the number of regulations a company has to meet; it is also about the diversity of the sources of regulations.
Employers must find ways to ensure their compliance with regulations by finding a single source through which they can easily keep abreast of relevant payroll regulations.
Some do this by outsourcing their payroll to outsourced payroll service providers or payroll vendors. However, there are other challenges with outsourcing the payroll function to payroll operators that must be considered, and the truth is that employers can do well to explore better options.
For example, in the UAE private-sector employers are required to comply with the WPS. The WPS was developed through the collaboration of the Central Bank of UAE and the Ministry of Human Resources and Emiratisation (MOHRE). Its purpose is to ensure workers get paid the right amounts at the right time.
The WPS includes various regulations – 80% of workers must be paid, 90% of a worker’s gross salary must be paid, payment becomes late 15 days from due date, etc. And non-compliance can result in various degrees of fines and penalties.
Companies in the UAE, therefore, need a payroll system where they can streamline compliance with a wide variety of regulations.
NOW Money provides such a system by serving as both a WPS agent and a payroll services provider. In this capacity, it is able to process payroll and also keep up with WPS updates, notifying employers of any regulatory changes and what will be required of them.
By using digital payroll software that keeps abreast of regulatory updates, employers can control an automated payroll process and maintain compliance.
6. Own and use your data
One of the reasons why we discourage outsourcing is the need for organisations to easily access and control their payroll data.
Why is this important?
With this data, the payroll team can generate business insights to help executives improve decision-making.
For example, we noted in the introduction of this article that many organisations are now setting key metrics and KPIs relating to payroll efficiency and accuracy and then measuring their actual results. In this way, they can know what is good and improve it, as well as identify what is inefficient and correct it.
“Having your own data gives you total control over it, even the raw version,” said Wayne Herbert, CEO of AI Assets, a data management company. “When you have access to this primary information you have a better capacity to make customised and detailed reports. Your employees become more confident because they know they have a wealth of insights they can use to make competent decisions.”
Furthermore, “owning your data could streamline data processing as you no longer have to use multiple information silos and can customise reporting and insights generation to meet your business needs,” he said.
By owning their own data and streamlining their data processing, organisations can better understand their business to help it grow.
7. Speak to your employees
While data can provide lots of valuable insights, it is also crucial to talk to your employees to gain additional personal perspectives.
For example, iPay Holding, a client of NOW Money, saw a 50% increase in sales performance among its retail team when it changed the frequency of sales incentives payment from quarterly to daily.
Interestingly, many are now arguing for daily and weekly remuneration of workers as a more efficient way to improve their well-being.
But won’t this higher frequency increase cost, and thus inefficiency? Not necessarily.
First, higher frequency will not lead to higher costs when employers and employees use the same account and there is no fee involved in transferring money. Second, a digital payroll software like NOW Money charges users the same fee irrespective of how frequent they pay their employees.
Nevertheless, the point here is that many companies can only find such opportunities to streamline their payroll process and improve the productivity of employees by talking to them directly. And since human resources are crucial to business success, keeping them productive and happy in this way can go a long way.
“Prioritising communication with employees can help to mitigate any payroll-related confusion,” says the Canadian Business College. “Communication can also facilitate the contribution of suggestions from employees, which could be used to improve the payroll process.”
8. Use integrated payroll software
Many of the payroll strategies above are easier to implement with an easily integrated digital payroll system.
With a digital payroll system, you can automate many processes, generate digitised records, store records on the cloud, generate insights from your data, and integrate payment schedules.
For UAE organisations, a digital payroll system like NOW Money can also help you comply with WPS regulations and keep abreast of important regulations.
In essence, with NOW Money employers can integrate, streamline, and simplify their payroll process to achieve greater efficiency – eliminating human errors, reducing cost, and saving time. As the need for payroll accuracy and efficiency increases, such a digital payroll software will become even more necessary.
As HR2B, a recruitment site, puts it, “there is no better way to enhance the efficiency and accuracy” of payroll processing “than by using payroll software, which not only helps businesses save time, but also avoids unnecessary mistakes.”
This is what NOW Money provides with its simple, cost-effective, and flexible payroll software. Using this software, you can automate many payroll processes, generate digitised records, store records on the cloud, generate insights from your data, and integrate payment schedules.
Moreover, as a WPS agent, NOW Money will help you comply with WPS regulations as well as stay updated with any relevant changes to the system that may affect your business.
In essence, employers can integrate, streamline, and simplify their payroll process to achieve greater efficiency – eliminating human errors, reducing cost, and saving time. As the need for payroll accuracy and efficiency increases, such a digital payroll software will become even more necessary.
[Do you want to try integrated payroll software that will help you streamline and simplify your payroll processing? Sign up on NOW Money or learn more about how this simple, flexible, and cost-effective payroll software can transform your organisation.]
Takeaways
- Many organisations are now evaluating the accuracy and efficiency of their payroll processes and seeking ways to improve it.
- By streamlining and simplifying their payroll processing, organisations can solve their payroll challenges and improve the accuracy and efficiency of payroll processing.
- This can take place by digitising electronic records and putting them on the cloud, using automation, streamlining how employees receive their wages and salaries, integrating payment schedules, streamlining compliance, owning and using their own data, and gaining insights from their employees.
- Many of these payroll strategies can be easily implemented with an integrated digital payroll software.
