Many employers, especially small ones, don’t have payroll management software. This means their HR department is saddled with exponentially more time-consuming work, the risk of errors and non-compliance, and arduous tax, ACA, and year-end filing management. When a business doesn’t equip their HR department with a payroll management system, they’re severely limiting their time and their capacity to perform. Here are five reasons why payroll software is crucial to any HR department and their success—not to mention the overall success of the business itself.
1. Payroll management systems keep a business in compliance, thus helping HR departments avoid heavy fees and fines or even lawsuits and damage to your reputation
One of the most important responsibilities of a human resources department is to ensure that the company is in compliance in every way: when it comes to documentation, training, tracking time worked, local and federal employment laws, and more. A payroll management system can be instrumental in helping a human resources department maintain compliance with payroll and tax regulations. If a company’s human resources department can’t reach and maintain compliance, they are risking costly fines, lawsuits, and also general damage to the company reputation. Being out of compliance with payroll and tax regulations can have consequences that even put an organization out of business. A payroll system doesn’t only make it possible for a company to reach compliance with payroll and tax compliance regulations, it will also make it easier to reach payroll and tax compliance with no errors and take less time.
2. Payroll software streamlines year-end, tax, and ACA filing for the HR department
Many HR employees dread the end and beginning of the year because they must handle ACA reporting, year-end reporting, and tax filing. The management of these tasks and information can take up weeks of human resources employees’ time. With a payroll system, human resource employees can streamline and automate these compliance requirements for the business. Since most of the information has already been stored in the payroll system, and often the system (like MP’s) often has a feature to create simple reports, human resources employees find that tax, ACA, and year-end reporting is a breeze. Because the information for reporting is stored in the payroll system and calculations are done by automated processes, the reporting and information is also always free from human errors. A beneficial byproduct is that a payroll management system gives human resources employees back time to focus on non-payroll and tax-oriented tasks during these busy seasons to focus on the management of other important tasks, like compliance with new laws and regulations, updating the manual for employees, checking in on and nurturing employee engagement, and also taking time to do succession and hiring planning.
3. Payroll management software ensures accuracy every pay period
One of the most foundational agreements between a business and its employees is a timely paycheck that is free of errors and also deposits in the employee bank account with no issues. When an HR department gets to use a payroll management system, they can fulfil that employee expectation and build trust between the business and its employees. Using a payroll software isn’t just good for employee-business relations. It also saves a human resource department time, money, and helps them maintain a good reputation with employees when the payroll system helps them avoid errors that they’d have to go back and fix.
4. Payroll software automates the payroll process and saves HR departments hours, if not days
HR departments can be much more powerful and productive in serving a business when they use a payroll system. A payroll management system can save HR departments hours, if not days of time spent on the payroll process. With payroll systems, a business gives its HR employees back hours, or even days, to focus on the management of other important tasks that serve the business. Without the burden of payroll, HR departments can also focus on making sure the business is fully in compliance, handle and plan for its hiring needs, nurture a better employee culture, update its employee handbook, find and test new tools for improved employee performance management, employee collaboration, and employee engagement.
5. Payroll management systems empower the average employee with self-service options (and save the human resource department time and liability)
When an HR department doesn’t have payroll management systems, they are left to handle employee payroll and tax information requests themselves on top of the other human resources work they must complete each day. This means that sometimes employees may need to wait to get changes made to their deposits, tax and bank information, etc. With payroll systems, HR can leave the management of these requests to the employee him or herself. A payroll management system makes the employee feel more empowered, and in control of their finances and tax information. It also saves the HR team time, as they don’t have to move away from their human resources tasks to handle these tax and payroll employee requests. As an additional benefit to the business, the organization as a whole and the HR department take on significantly less risk and liability when it comes to employee tax information and payroll information, since employees enter this information in the system (and also any updates) themselves.
For more from our HR and payroll experts, check out our article on solutions to your top 5 concerns about switching payroll companies.
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