Top Payroll Automation Use Cases and Benefits 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.

Is it possible to fully automate payroll?

Both yes and no can be used to answer this question. Even if all payroll management duties can be automated, a payroll professional is still required to oversee, monitor, and change plans in the system. Various payroll management activities can be handled by automation solutions. 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.
Approvals for overtime pay: The automation tools ask the supervisor for permission, log overtime in the employee's performance database, and modify the compensation information as necessary.

3. Commissions :

In performance-driven jobs when a person meets a set success criterion, an automated software can alter the salary or perks based on the individual's performance. Based on the commission rules entered by the business, including duration, objective, etc., the program computes commissions.

4. Based on approval tasks:

Processing of Garnishment Orders: A garnishment order is a court order that favors the plaintiff seeking to recoup damages from the defendant. 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.

5. Processing of employee advances and repayments:

Using the employee self-service (ESS) capability, employees can submit requests for advances online and receive manager approval. The software keeps track of both the advance and return dates.

6. Recordkeeping:

Every month, the automation program automatically updates data on the employee paycheck.

7. Payroll reports :

The software also generates an employee's payroll reports, enabling managers to streamline federal agencies in relation to an employee's tax obligations.

8. Payroll taxes:

Automation enables businesses to designate a specific portion of their 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.

9. Employment verification :

A lot of 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 firms, employment verification typically takes several days.

Benefits of Automating Payroll

1. 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.

2. Saving money :

The study also reveals that companies utilizing 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.

3. 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.

4. 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.

5. 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.