What is payroll automation?

No matter how big or small the organization, there’s no way around payroll. Calculating wages and salaries and paying employees for their work is a necessary process every business needs to undertake. But since payroll is so complex and time-consuming, it’s definitely not everyone’s favorite task. 

While there’s no avoiding payroll, businesses can significantly reduce the complexity and workload behind it by automating their processes. Let’s take a look at what payroll automation is, how it works and how businesses can benefit from putting their payroll operations on autopilot.

Automating payroll means streamlining all the processes linked to payroll management and processing as well as the processes around employee payments. This is achieved through payroll software which replaces manual payroll processes so that the latter can be run automatically—without the need of human intervention.

An automated payroll system can carry out processes like calculating pay and benefits, filling spreadsheets, updating employee information, issuing payments to employees, keeping payroll records, and more.

The fact alone that payroll automation software takes over mind-numbing manual tasks like entering employee hours and overtime is a great selling point to switch to automated payroll processes. But there are even more advantages that make investing into an automated payroll software a no-brainer.

Payroll automation reduces errors

Automating payroll is a great way to eliminate payroll errors. Especially when working with spreadsheets and important information that is distributed across many different files and systems, a small mistake can result in many hours of extra work—not to mention the stress and headache it causes.

Automated payroll systems prevent mistakes from happening and allow businesses to change and update their data in one centralized database. Depending on the software, employees will even be able to update their personal information themselves via self-service functions.

Payroll automation saves time (and money)

The use of software makes payroll calculations and processes faster than ever before. What’s more, automated payroll systems free up time for HR managers to focus on more important tasks such as employee happiness, talent recruitment, onboarding, and creating a welcoming and positive workplace experience.

This increased process efficiency and productivity reduces operating costs. Plus, it can free up as much as three to five extra hours of work to be spent on different tasks.

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Payroll automation increases security

Employee payroll data is confidential information that should be kept safe and protected from unauthorized access. Printed spreadsheets and physical copies of payment details and other sensitive information pose a security risk that can easily be avoided by digitized, automated payroll processes.

Payroll software typically uses encryption to ensure confidential data is protected at all times. It also helps track important payroll processes and store tax-relevant details in a compliant way so that the organization is well-prepared for potential audits at any given moment.

Payroll automation makes payroll easier to handle

Managing payroll is incredibly complex, and there are numerous payroll functions that need to be taken care of. Automating large parts of the payroll process reduces the amount of tasks that have to be handled individually, which makes managing payroll a lot easier on an overall level.

Thanks to payroll automation, organizations can calculate payroll taxes, export payroll data, and generate reports on workforce costs, employee productivity, and more in an efficient way. Automation also makes data management in payroll a lot easier since it enhances the transparency and accessibility of the data.

The key to successful payroll automation is a good software that does all the heavy lifting. Choosing the right payroll software is therefore the first step towards putting payroll on autopilot. There are many different aspects to consider when selecting a software solution for payroll (user-friendliness, scalability, security, and more), but in order to achieve the highest level of automation, there are two aspects that are crucial:

• Payroll software integrations: The more workforce management tools can be integrated with the payroll software, the more processes linked to payroll can be streamlined and automated. 

• Software capabilities and features: If the objective is to automate as many payroll processes as possible, the chosen software should come with many different capabilities and features.

After deciding on a software solution, the organization can then proceed to feed their data into the system, train employees on how to use the new system, and implement its new automated payroll processes.