Payroll plays an integral part in all organisations. Payroll process involves payment determination of employees for their work in the company depending on their time or productivity. It also includes calculation of benefits, and statutory deductions. It needs to be processed periodically such as weekly, bimonthly, monthly or even daily in some cases.
An organisation’s payroll department is not only responsible for employee’s compensation. It is also required for protecting the company’s reputation by ensuring compliance with various legislations. Many a times payroll is viewed as merely a processing function. They fail to recognise is importance and overall effect it has on businesses. Payroll can potentially affect every aspect of the organisation, right from its reputation to the morale of its employees.
Increase employee morale
A critical aspect of payroll is its impact on the morale of the employees. Employees need to feel assured that they can be paid on a consistent and timely basis. Late payments may cause employees to question the financial stability of the organisation. It could also compromise on the work environment, which could lead to underperformance as well as ignorant behaviour towards the organisation. Employees are the building blocks of every organisations, and thus the importance of a reliable and accurate payroll cannot be overstated.
Compensation Package
Payroll helps an employee to feel his net worth within the organisation. It is not simply limited to their compensation though. It includes everything compensation as well as salary, bonuses and benefits are incorporated into payroll. Depending on their overall annual performance reviews, employees are typically rewarded with a salary increments or a hefty bonus or in some cases both. This has usually known to boost an employee’s performance and lead to a positive effect on the organisation.
Uphold Company’s Reputation
Apart from financial obligations that an organisation has towards its employees, it also has to ensure that its payroll activities adhere to the country’s tax obligations and comply with employment legislations. Its ability of being able to meet tax obligations on time and following legal compliances is required for establishing the organisation’s reputation as a stable employer. Eventually this can ultimately attract and retain the right pool of talent to the organisation.
Re-allocation of Resources
Manual paperwork or even spreadsheets involved in computed payroll make the process an extremely time-consuming and manual job. In addition payroll needs to calculated regularly every month. So extra resources need to be employed in time to ensure the accuracy and precision of payroll calculations. Many organisation are increasingly relying on reliable payroll software systems to tackle these issues. These systems allow a more comprehensive data management and provide companies with customised reports and enable taking informed decisions. Moreover they are up-to-date with the latest legislative changes and thus, organisations need not worry about an overhaul on their current payroll system just to keep up with recent legislative changes. Payroll automation also allows companies to save on costs in the long run. It frees up valuable resources that can focus on other business areas of the organisation.
The payroll department is integral for the organisation’s image. It enables everyone to determine a company’s culture, branding and financial stability simply by looking at its payroll processes. Thus, it makes sense maintain efficiency of this key department.
