Growing your business can be very challenging when not equipped with the right management tools. Here’s a quick story about how a BPO company learned  that the hard way.

After passing up on the chance to upgrade to a less tedious payroll system, the company started facing one problem after another. Two months after, they discovered that there are still at least 10 previous employees receiving their full monthly salaries.

The reason: those 10 former employees were still tagged as “Active” on the payroll officer’s manual spreadsheet. They ended up wasting six months worth of wages to these separated employees. The cost of this tiny mistake amounted to hundreds of thousands of pesos, not to mention the job of the payroll officer.

Fast forward to a year later, they dealt with an even bigger price tag. Dishonest  reporting of overtime led to overpaid employees. The company also faced penalties due to miscalculation of SSS benefits and taxes. To top it all off, they had multiple lawsuits from complaints of disgruntled employees. Altogether, these issues resulted to almost  PHP 1 Million worth of damages. This was a far cry from the price of the payroll software the BPO neglected.

The Downside of Manual Payroll

In a recent study of Philippine firm 23% of companies  still compute payroll manually. Doing so will subject the companies to a handful of concerns such as:

  • being prone to errors and fake entries;
  • the process alone is time-consuming;
  • depending on the size of the company, there might be a need for  several people to handle payroll;
  • backlogs due to the tedious process; and
  • complaints and irate employees, If not done properly.

These were some of the problems encountered by the aforementioned BPO company. They invested too much on manual payroll which only resulted to the company losing a lot of money.

Solving Attendance Issues With Payroll Automation

In the Philippines, payroll processing is quite complex since computation of government benefits must be taken into consideration.

Each employee will be in a different group and thus a different deduction. There are also certain benefits that are required by the law which may be very difficult to manage if done through manual computation and tracking. Take for example, the number of vacation and sick leaves that employees are entitled to every year. If you do not keep track of these on a regular basis, it will be easy to commit mistakes and end up managing a irate employees.

These are just some of the issues that a payroll software can solve. Through its automated feature, it empowers employees to file and keep tabs on their remaining number of leaves as it consequently records every employee input into the system. This saves HR a lot of time and mistakes. Employees can also keep track of their time record. Having a payroll automation can prevent a lot of disputes from happening before employees get their salaries.

An Accurate Payroll System Helps Resolve Attendance Issues

Investing in payroll automation comes with a price. There is usually a set-up and training fee. This also  covers entering all of your employees’ data and training your payroll team to use the software.. Fortunately,  some companies actually let you use their payroll software for free.

There are a lot of important benefits of  having an automated payroll system in place such as but not limited to:

  • HR getting less to none complaints about salary inconsistencies;
  • changes can easily be reported and addressed even before the pay is released;
  • HR can determine right away if an employee is trying to outsmart the system by reporting false overtime hours and clock ins;
  • saving a lot of time for HR so they can also tend to other important tasks; and
  • less paper clutter

The key benefit of using a payroll system is having the highest level of reliability on your data. There are employees who do not really care about clocking in and out on time only because either their bosses are not strict with the company’s attendance policy or they rely on someone else to buddy-punch for them. When left unchecked, employees will  continue to do such actions at the expense of the company.

The solution is to use a biometric system wherein employees must have their fingerprint scanned in order for them to clock in. This makes the system less prone to tampering. Having a biometric system will push for the employees to be more conscious about coming in on time.

Why Payroll Automation is the Answer

A reliable payroll system is important in running a business. While it is true that there are costs involved, the story of the BPO company clearly shows that it is going to be worth the investment in the long run.

What payroll issues do you currently have? Tell us in the comments below and we will help you find the solutions you need.




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