We will explain the benefits of the payroll cloud. 

What is a Cloud Payroll System? 

Cloud Payroll System is a payroll management system that manages, maintains, and collects data of employees to automate their payments on the cloud remotely. Good cloud Payroll Systems can help your business lower operational costs, and you can do that within the legal and financial rules. It helps manage employees from onboarding to exit with an internet connection and a computer. You can securely disburse the salary with just a click of a button. 

Small and large businesses are slowly shifting to cloud payroll systems from legacy payroll systems because of cost savings and operational efficiency. 

Payroll Process

A payroll process requires careful planning by the payroll officer. There will always be ongoing tasks that require constant attention and monitoring, such as social security funds, withholdings, etc. You can divide the process into pre-payroll, payroll, and post-payroll. 

Pre-Payroll Activities

• Defining Payroll Policy
• Gathering Inputs
• Input Validation

Actual Payroll Process

• Payroll Calculation

Post-Payroll Process

• Statutory Compliance
• Payroll Accounting
• Payout
• Reporting
• Statutory Compliance in Indian Payroll

Benefits of Cloud Payroll Systems

Here are the key benefits of cloud Payroll Systems: 

#1 Lower operational costs

Companies don’t need to prepurchase server infrastructure or hardware with cloud payroll systems. You also eliminate the need to hire people to manage these systems. It is a disruptive technology, which is why it is affordable for businesses of all sizes. The vendor manages the cloud payroll systems and makes your life stress-free and more manageable.  

#2 Faster and more efficient

The previous payroll systems (legacy) cannot stay in the race when the world has changed to a data-driven, fast-paced, and well-connected world. The best legacy system will not be any match for cloud payroll systems as the cloud payroll systems require lesser time and fewer resources to finish the same tasks. You can access employee information and payroll at any time and from anywhere. Your finance or HR team can respond quicker. 

#3 Automated compliances

Cloud payroll systems automate PT, ESI, PF, and TDS compliances. They also automate their return filings. Another benefit is it helps in complying with changes on the go. It is a hugely helpful feature as there are frequent changes in taxes and regulatory laws. Cloud payroll systems will automatically incorporate the changes; you don’t have to do it manually. 

#4 Centralised employee data

Your HR handles a vast volume of employee data such as salary revisions, compensation, investment declarations, onboarding, etc. It can be challenging to manage this information when the records are not centralized accurately. There is one centralized data source when you use cloud payroll systems.

#5 Relief for the HR team

Each month, HR has to collect expense proofs to validate them from the employees. It can take considerable time, and they must answer reimbursement-related questions. It is very time-consuming and requires a lot of back and forth on emails. Cloud payroll systems have self-service employee portals that relieve the pressure on HR. The employees do the proof submission task. Now all HR needs to do is validate it. You can even outsource the validation part to a payroll provider. Your HR can focus on other important stuff such as planning, recruiting, etc. 

#6 Automated employee onboarding

Cloud payroll systems allow employee onboarding by letting the hires upload documents such as Aadhar, degrees, bank details, etc. HR needs to automate the checklist and software’s necessary processes, and voila! 

#7 Comprehensive reports and analytics

A significant difference between legacy and cloud payroll systems is the generation of analytics and management reports. Older (legacy) systems were stuffed with duplicate, irrelevant, and unorganized information, which made it challenging to build and sort any insights. The reports that you received from these systems were not helpful for decision-making. 

Cloud payroll systems overcome this challenge and bring insights after collecting the required metrics depending on real-time data. You do not need any separate data warehouse or business intelligence systems.  

Conclusion

Cloud payroll systems make life easier for businesses and business owners alike. If you want a more efficient and cost-saving HR solution, you should go for them.

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Employee morale may suffer, and productivity may be hindered by mistakes in processing and executing wages. Maintaining legislative compliance is crucial to ensuring that computations are accurate and completed on time. Businesses require a deeper grasp of the entire process and why payroll automation is necessary to guarantee compliance with regulations and employee satisfaction with the payroll process.

Payroll Meaning

The process of paying employees’ salaries is known as payroll. In payroll processing, making a list of the personnel who need to be paid comes first, and recording the expenses comes last.

It’s a slightly tedious procedure that requires cooperation from numerous teams, including payroll, HR, and finance. However, organizations can easily handle all the complexity by utilizing contemporary technology.

The procedure includes determining the amount owed to the employees for a specific payroll cycle after making the required adjustments for deductions like TDS, employee PF contributions, and meal vouchers.

Payroll is one of your most significant monthly expenses and a time-consuming chore, so as a business owner, you should be aware of the complications involved. The teams must closely monitor the entire process.

Responsibility For Employee Payroll

Primarily, HR manages the payroll of the organization. However, in the case of SMEs, the business owner may perform payroll duties, including generating monthly pay slip for 2022. 

Recently, hiring a third-party payroll company meaning to provide payroll services, including payroll accounting and implementation of an efficient payroll system, has become popular too. 

Challenges In Managing Payroll System 

• Employee information may be compromised, and failing to protect it could harm the company’s reputation.
• Paper-based documents are prone to loss. Unauthorized access is only a password away, even if the documents are stored on spreadsheets.
• The dynamic teams must spend a lot of time and energy responding to numerous update requests. Salaries could be incorrectly credited if these data aren’t updated.
• Employees can miss the deadline for submitting records. This significantly slows down the entire procedure.
• Using spreadsheets or any other manual approach involves time-consuming calculations, even though there are no upfront costs.
• This process is handled by numerous teams, all of which have access to these spreadsheets. Any information handling error or breakdown can have an impact on enterprises.

Automation: The Solution To Payroll Challenges

There are a variety of solutions available, ranging from easy wage calculating tools to Human Resource Management Systems (HRMS).

Here are some features to think about when selecting payroll software:

Simple to use: There should be significantly fewer requirements for a user guide or training module. The software should be straightforward to use.

Automation: The program should assist companies in automating their payroll procedures and ensuring their workers are paid on schedule.

Employee self-service: With only a few clicks, employees should be able to check their payslips, make investment declarations, and change their papers using the program.

Time, attendance, and leave management: The software should offer a website, biometric devices, or APIs for leave & attendance management.

Frequently Asked Questions

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An employer implements this for their employees. Employees are the foundation of any organisation. As a result, organisations must ensure their employees are satisfied, and one way to do so is by paying their salaries on time and consistently. This is where payroll management comes in.

We will discuss payroll meaning, its challenges, types of payroll processing services, and more in this article. 

What Is Payroll?

Payroll refers to the complete information about the amounts an organisation pays to its employees. Payroll and salary are not the same. While salary is the amount earned by employees, payroll is the whole process of designing policy for the organisation, calculating incentives, including the deduction of taxes and provident funds, and distributing the same in a timely fashion.

From employee onboarding to retirement, human resources takes care of all that. Thus, it is necessary to understand payroll meaning in HR to define payroll. Hence, the payroll process means gathering all information related to an employee’s payroll, from their hiring to their departure. The payroll services can either be handled internally or outsourced based on business requirements and resources. 

Steps To Execute Payroll

With remote work becoming more popular, you can even implement a cloud payroll system. Following are the steps to execute payroll accounting in your business :

• Define the policy

The first step of an organisation is to set a payroll policy. It should include everything from benefits, leaves policy, deductions, overtime, etc. 

• Make a list 

The next step is to list all the employees who need to be paid by the organisation. This will act as a forever record. Any new enrollments can be added to the same. 

• Gather and validate employee information

For compliance with tax laws, you need to have basic information about the employees. These include their PAN(Permanent Account Number), permanent address proof, bank account details, etc. For smooth operations, you can collect these when they join. It may be possible for different departments to collect different information. Hence, before entering this information into the system, coordinate with each department properly. 

• Calculate the salaries and taxes

Calculate the employee’s net pay after considering all the deductions, bonuses, incentives, leaves, reimbursements and taxes. In addition, to maintain income tax compliance, calculate the tax dues, employee’s provident fund, and more. 

• Distribute salaries and pay taxes

Once all the calculations are done, the next step is to input all this information, make payslips and then distribute the same. Further, file the returns timely and pay any tax dues.

Challenges In Managing The Payroll Management Process

The meaning of payroll company may vary across businesses. While for some it’s their own company, it’s a third party for others.  However, organisations may face specific challenges while managing them. Here are a few. 

• Manual errors while entering data
• Delayed, missed, under or over salary payments
• Not updating employee information in the system 
• Missed income tax due dates 
• Incorrect tax forms or details 
• Lack of coordination between departments leads to late approvals of paid leaves or reimbursements.
• Misuse of employee’s confidential information
• No reliable backup of employee information

Types of Payroll Processing Methods

Following are the types of payroll processing methods. 

• Excel-based

One of the most popular and common methods used for payroll processing is the Excel or spreadsheet method. In this method, all the employee details are entered into Excel. With the Excel formula, the net salary and compliance amounts are calculated. However, as the company size grows, this method can be challenging. 

• Outsourcing 

You can have a payroll system either in-house or outsource the same to professional third-party payroll service providers. This eliminates the stress of payroll as well as missing any statutory compliance. The outside agency takes care of everything. 

• Processing solution

Another method is employing payroll processing software in your systems. Even if you outsource your payroll system, it may still be immune to human errors. However, with automation processing software, the process will be faster, more efficient, and eliminate the risk of manual errors. 

Best Payroll Solution For Your Business 

Implementing a payroll management system project requires proper time and resources. In a company with multiple employees, paying each one individually is a time-consuming task. It is also difficult to track the payments. PayU can solve this problem with PayU Payouts. Let’s see how?

• Simple and convenient

With PayU, you simply add funds to your account, add employee details in your dashboard and your work is done. The software will do instant payouts, including reimbursements, to your employees every month. The payments can be made even on bank holidays.

• Easy tracking 

You can download the reports as well as track the status of the payments from your dashboard. It offers easy tracking through automatic mapping of the UTR or Reference number with the respective debit transaction. In addition, you can access the dashboard through your mobile as well. 

• Multiple secured payment options

The online payment method offers multiple payment options including net banking, UPI, cards, and much more. Furthermore, the payment links are sent to vendors, where they can choose the payment mode. 

• For all businesses

Whether you are an eCommerce firm, insurance company, banking company or even a gaming platform, you can make instant disbursals and payments like employee’s salary, commissions to agents, customer refunds, and more. 

Conclusion

Whether you are a small business or a large business, you need a proper payroll system in place. This payroll system can help in reducing employee turnover and avoid tax penalties. So, it’s best to employ one as early as possible. 

FAQs

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