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6 Payroll Process Improvement Ideas For 2021

By Timerack

June 1, 2021

Let’s face it, we’re all feeling the pinch after a financially tough year last year. But instead of clutching at straws, optimizing and improving your payroll software is one way your business can save money in 2021.

More than a year into the pandemic-induced-economic downturn, if there’s anything you can change to even out the books, optimizing internal processes to ensure your business is getting the best value for money should be top of the list. 

Keep reading for our list of payroll process improvement ideas on how to make this area of your business more manageable, saving you time and money. 

What is the Purpose of the Payroll System?

Generally speaking, payroll refers to the process that ensures your staff members are paid their wages on time. But why does it need to be optimized? We hear you ask.

Well, believe it or not, ineffective payroll systems can actually end up being extremely costly for your business. While at a glance it may seem cheaper to process payroll manually, managing data collection such as timesheets takes time and requires trained human resources to pull off. And as the saying goes — “time is money.”

Not only this, manual payroll processing also carries a risk of human error, which can cause all kinds of problems within your organization. Imagine one of your employees isn’t paid on time, or receives an incorrect amount on their paycheck. This can generate mistrust and cause a loss of confidence in your organization. 

There are infinite reasons why improving payroll services and operations can benefit your business, but today, we’re here to give you some concrete examples of what you can do to make it happen. 

To find out more about what payroll software is and the advantages of using it, check out our Complete Guide to Choosing Payroll Software.

1. Automation 

If you’re still processing payroll manually using paper timesheets and pay checks, stop what you’re doing and listen up. 

Using payroll software, your employees’ salaries will be processed automatically, and any raises or bonuses will automatically be added to monthly wages as soon as a member of management has registered them in the system.

By making the shift to a paperless system, you’ll also be doing your bit to help reduce your business’ carbon footprint. So it’s a win-win situation all round!

And, while automating your payroll may seem like a hefty investment at the beginning, trust us, you’ll reap the rewards in the end when you begin to save money.

2. Integrate Payroll with Time and Attendance Software

If you’re about to automate your entire payroll processing system, one of the ways to increase its effectiveness is by integrating it with time and attendance tracking software

For those who don’t already use it, employee time and attendance tracking software helps reduce labor costs by recording the amount of time your workers spend doing their job so you don’t have to.

Here at Timerack, our software does everything from replacing manual data entry with data collection via gadgets such as mobile apps that work using geofencing, real-time reporting that constantly syncs employee data, biometric identification, and contactless punches.

By syncing your payroll system with this software and bringing the two together in one platform, you’ll be able to process monthly wages quicker and more accurately. 

You’ll also be able to use data analytics to assess employee productivity levels and work out exactly what tasks your workers are spending their time on.

Here at Timerack, our time and attendance solutions can be synced with 24 different payroll systems. Learn more about the benefits of integrating your software in our Complete Guide to Choosing Payroll Software.

3. Update Update Update

Once you’ve automated your payroll process, another means of improving payroll services and automations is to make sure you’re running the most up-to-date version of the software. 

Programs can start to run slowly when they’re in need of an update, so make sure you’re not losing any valuable time (and therefore money) to this.

If your payroll processes were already running automatically, now’s the time to update old versions of your software. Updates can also help ensure programs are running as accurately as possible.

4. Round-The-Clock-Access For Workers

When it comes to payroll process improvement ideas, one of the most important features your software can include is the ability for employees to access and update the system themselves, regardless of the time of day.

A cloud-based payroll system that can be accessed anywhere, by anyone, is vitally important for entering information about sick days, vacation days and — if your payroll software is linked to time and attendance tracking — when workers are clocking in and out.

Increased transparency, which helps foster a sense of trust between management and workers, won’t go unnoticed by your staff either. 

5. User Experience 

With the aforementioned in mind, it’s very important your staff members can navigate the payroll software easily. 

There’s nothing worse than a complex system which is difficult for employees who aren’t trained in the software to follow. This will only result in time wasted by both your HR department, who ultimately manages the software, and workers, who have more important tasks to be getting on with.

If the payroll technology could be difficult for the least tech-versed employees, ensure you write up instructions on how to use the step by step payroll process and make them available internally by sharing on communication channels. 

You could even hold payroll software training sessions and renew them every few months or so, as the technology updates.

6. Constant Review 

Last on our list of payroll process improvement ideas for 2021 is to constantly review your payroll software to make sure it remains in line with state and federal tax legislation. 

While staying on top of legal changes is a payroll processing best practice, things can easily slip through the net. And given that regulations are constantly changing, before you realize it, your business could be liable to litigation if it fails to follow payroll tax requirements. 

Some payroll software will automatically update according to any legal changes, but if yours doesn’t, then make sure the team in charge of operating it is staying on top of these. Failing to comply could be an expensive oversight for your business. 

Closing Thoughts 

So there you have it. By following our six payroll process improvement ideas, your business could be well on the way to improving its payroll process this year.

At a time when businesses may need it the most, it’s often the least obvious areas that can save you the most amount of money in the long run. And payroll is no different.



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