Companies consider payroll to be a major expense. In fact, a successful company will spend as much as 30% of their gross revenue on payroll alone. This is the biggest reason why many companies are considering upgrading to an automated payroll software.
Will Automated Payroll Remove Your Personal Touch?
Terry has been running a successful manufacturing business for over 30 years. However, he has problems with keeping track of a ballooning payroll expense. He brought in Camille as a payroll manager to help him solve these problems.
Camille recommended one solution: upgrading to an automated payroll software. Terry was hesitant, because he has always believed personal is essential when it comes to payroll. He also had trouble trusting his company’s finances to computers, saying that a person can spot errors better than a program.
In order to convince Terry, Camille presented him with the benefits of having an automated payroll..
The Benefits of Automated Payroll Software
1. Faster Payroll Processing
Happy employees work harder and perform better. Delays in salary disbursement, however, lead to job dissatisfaction which could end up costing your company even more. Manually computing the payroll and having to double-check it for human errors can take a huge amount of time. With the right payroll software, what would normally take days to manually process will only take a few minutes.
2. Lower Payroll Processing Costs
According to the American Payroll Association, using a good automated payroll system could reduce payroll processing costs by up to 80%. Considering that 30% of your profits go to payroll, an 80% reduction in that expense isn’t bad at all – and that’s just considering the processing costs. When you factor in the savings in terms of time, the figure becomes practically incalculable.
3. Higher Accuracy
It might seem counter-intuitive for traditional leaders such as Terry, but in the case of automated payroll processing, less human intervention and monitoring often equates to higher accuracy.
Every accountant, bookkeeper, and payroll manager know that computing income taxes and other deductions can be stressful and time-consuming when computing payroll. If you factor in the fluctuations in tax rates based on changing administrations and new laws being passed, it can be difficult to ensure the accuracy of your payroll. A good automated payroll software would let you handle all computations automatically and ensure accuracy.
4. Less Stress and More Productivity
Remember that your employees are subject to work stress and, as the American Institute of Stress uncovered, this leads to accidents, absenteeism, diminished productivity, and other effects that translate to a higher cost for your company.
Although more and more businesses are switching to automated and biometric time keeping systems, a lot are still dependent on old punch cards and manual encoding as part of their payroll process. Automating your payroll system will save you the headache of manual timekeeping and will also eliminate one factor that encourages low productivity and absenteeism.
Seeing these benefits, Terry finally considered upgrading to an automated payroll system for his company. Camille walked him through the next steps in finding the payroll system that worked best for his company.