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Why We Love Payroll Automation (and you should too!)

6/20/18 10:54 AM

Even in this day of cloud-based software and automated employee management systems, you may still be relying on manual time tracking and accounting. Or you’re using separate, non-integrated accounting systems for time tracking and payroll. Either way, the bottom line is this: There’s a much greater chance for costly errors of all sorts, from missing pay to penalties for inaccurate tax payments.

So, why do we love payroll automation and how does it affect your daily save and the overall financial health of your company? That's easy!

Automation Offers a Reduction in Payroll Errors

There’s no doubt about the loss that can come with relying on manual data entry, manual payroll processes, or manual reconciliation of separate automated systems for time tracking and payroll. It creates a healthy environment for greater risk of human error, a decrease in productivity, and damage to employee engagement — all of which can result in additional costs to your business.

Time Saving Payroll Automation

[View the full Payroll Automation Infographic here.]

Complete time and payroll automation can eliminate timekeeping errors, with no manual transfer of data or manual calculations. According to the American Payroll Association (APA), the clerical error rate is between 1-8% for companies that manage and track their time and payroll manually. Correcting these errors can take up valuable time as well. For every 25 full-time employees, you are likely expending 100 wasted person hours per year on manual payroll processing. This equates to an annual expense of $3,250 per 25 full-time employees. You can reduce payroll errors by an average of 60% by automating your process.

payroll solution guide

 Payroll Automation Has Real-Time Visibility

In today’s competitive environment, you are looking for more actionable data analysis, customizable dashboards, and consolidated reporting. More often, payroll is being flooded with data requests — not only at year-end so you can view historical performance, but throughout the year so you can gauge performance in real time.

Much of the data being requested is stored in systems that administrators manage and operate daily. When you use multiple and/or disparate systems, there is no single source of truth to provide accurate, consolidated data. This presents a time-consuming and frustrating problem when you are faced with:

• More frequent requests for reports

• A higher number of reports wanted with each request

• Requests for the same data compiled in different views to highlight specific trends

Payroll Automation Real time data

[View the full Payroll Automation Infographic here.]

Integrated timekeeping and payroll automation systems ensures that data reporting is accurate, without multiple sources of the “truth.” Reports that are pulled from a single system into a usable and easy-to-read format provides you with insights to manage costs and grow your organization, such as detecting performance highs and lows so they can be more agile and responsive in their operations.

 Automated Notifications

Nothing is better than being notified in a timely manner about any payroll or timekeeping errors. With payroll automation you can schedule alerts for any mistakes, saving you the hassle of manual review, which, on average can take Payroll Specialists 5-6 minutes per employee, per payroll (APA). Automation also allows you to flag exceptions that violate your organization’s policies and alert managers, so they can act on actions such as missed punches, early or late arrivals, and extended or skipped breaks — all of which can result in payroll errors.

 Automation Can Be Integrated

The goal is not to just replicate existing manual processes with integrated applications and data approach. Sure, it might deliver some value and cost savings, but it doesn’t provide a comprehensive approach to creating efficiencies. Truly effective HCM solutions are built on a single, unified platform and provide a single source for payroll and timekeeping to deliver the improvements needed for end-to-end processing and creating real efficiencies with lasting value. When key improvements are made, beneficial business results can be achieved.

When using a single-platform solution for payroll and timekeeping, you are able to realize improved net value. An SMB Group study showed that midsize organizations using (cloud-based) workforce management solutions saw improvement in these key performance indicators (KPIs):

• 40–60% increase in utilization of staff resources

• 20–40% improvement in enabling company growth with same or reduced staff/ resources

• 4–6% increase in overall company productivity

• 3–5% improved net impact on company profitability

While the numbers above make a compelling case for why we love payroll automation and for investing in new or updated payroll technology, you may still be reluctant to make the shift. It can be intimidating- the challenge of figuring out which technology best meets the needs of your organization. The other hesitation is often cost — in which case you may be asking: “What is the cost of doing nothing?”

In a world of constantly changing regulations, ever-advancing technologies, increased business expectations, and data-driven demands, a more pertinent question may be: “How long can I hold off doing nothing? And what is it costing me to delay the inevitable?”

 payroll solution guide

 

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