Top 9 Payroll Automation Management Use Cases and The advantages for 2023
Calculating and monitoring employee salaries, wages, and benefits to ensure prompt payments in accordance with national and international laws is known as payroll management. Traditionally, businesses assign a team of payroll specialists or a payroll clerk to carry out such activities. In many businesses, payroll management is also the responsibility of the HR or finance/accounting staff.
Around the world, automation technology is changing how businesses operate. Enterprises strive to automate business operations like payroll management because it essentially entails a lot of repeated tasks.
In order to increase process efficiency and cut down on time spent on monotonous operations, payroll automation is the practise of streamlining payroll administration services, such as tax preparation, salary and wage payments, recordkeeping, etc., using automation tools. Automation frees up employees' time so they may focus on more important, strategically important decisions as payroll administration is implemented by HR or Finance/Accounting specialists.
The top payroll automation use cases are as follows:
1. Timekeeping :
It is an important consideration when evaluating an employee's performance. Businesses use timekeeping to keep track of how long employees' projects take. WLA and RPA are examples of automation tools that can track employee access to the payroll platform, log their access times, and produce an audit trail for future investigation and auditing.
2. Timesheets :
An automated system, may gather employee clock-ins and clock-outs by combining information from login platforms. Additionally, the software looks for inconsistencies on time cards and notifies the supervisor before requesting payment.
3. Approvals of overtime compensation :
The automated tools submit an approval request to the supervisor, log overtime in the employee's performance database, and modify the compensation information as necessary.
4. Commissions:
In performance-driven jobs where an employee achieves a pre-defined success indicator, an automated software can alter the salary or perks in accordance with the individual's performance. Based on the commission rules entered by the business, including duration, objective, etc., the programme computes commissions.
5. Based on approval tasks:
- Processing of Garnishment Orders:
The court's judgement granting the plaintiff's request for a money judgement against the defendant is known as a garnishment order. The automation tool executes the garnishment order and asks the management for permission. While it might appear that this is an unusual circumstance, the ADP research indicates that 7.2% of US employees had their wages garnished for a variety of reasons, including child support, debts, and student debt. Processing garnishment orders enables payroll administrators to secure sensitive information while streamlining interactions with state agencies.
- Processing of employee advances and repayments:
Employees can submit requests for advances using the programme and receive manager approval using the employee self-service (ESS) capability. The software keeps track of both the advance and return dates.
6. Payroll statements:
Additionally, the software generates employee payroll reports and enables managers to streamline federal agencies in relation to employee tax obligations.
7. Taxes on wages:
Automation enables businesses to designate a specific portion of payroll as tax payments to the government. It is imperative to adhere to the tax rates and laws because they tend to change frequently. Businesses can scale their operations without being concerned about the tax burden thanks to tax automation software.
8. Verification of employment:
Many services demand that the employer confirm your employment. For instance, a worker might submit a loan or mortgage application. In this situation, banks need employment and wage documentation. Automating not only saves payroll administrators time, but also improves employee happiness because, in large organisations, employment verification typically takes several days.
9. Recordkeeping:
Every month, the automation tool automatically updates data on employee payroll.
Benefits of Automating Payroll
Human error factor - Implementing payroll automation reduces the process's exposure to human error. The American Payroll Association reports that over half of US workers quit after twice having difficulty receiving their paychecks. It illustrates how expensive payroll administration manual errors can be for a company.
1. Saving money:
The study also reveals that companies utilising a system that integrates payroll and timekeeping tasks outperform their revenue projections by 7% on average. Payroll responsibilities often require more people in the HR or finance/accounting departments, therefore paying for such huge teams is expensive. Companies occasionally even contract out their payroll services.
2. Quick procedure :
A lot of automation tools can calculate monthly payroll in just a few minutes. This procedure used to take longer because the clerk had to manually examine the spreadsheets and perform the appropriate computations. Almost every step of the payroll management process is automated, which drastically reduces processing times.
3. Reports :
Automation tools are capable of producing reports on various payroll statistics that assist businesses in monitoring their cash flow, employee turnover rate, and other important critical statistics. Numerous reports, such as monthly payroll reports, MIS reports, employee detail audit reports, professional tax computation reports, etc., can be generated by the software.
4. Data security :
It is the responsibility of every business to safeguard the data of its personnel. A significant amount of sensitive data, such as salary, advances, or hours worked, are involved in the payroll administration process. Spreadsheets or emailing such private information among team members increases the risk of security lapses. The payroll management staff can streamline the information more securely thanks to automation.