Ruelha Mascarenhas
Ruelha Mascarenhas

Remuneration is one of the biggest reasons why people come to work. Imagine the stress a professional must endure if there is an error in their salary computation, or worse – if they don’t receive a month’s pay after all their hard work. Payroll processing only appears like an effortless task. But in reality, handling payroll is no joke, and it gets increasingly challenging as the size of your business increases.

The most significant limitation in managing payroll is complying with relevant and area-specific labor and tax laws, which are subject to periodic modifications. Non-compliance can lead to heavy penalties, resulting in your employees' losing faith in the organization. Sure, this also translates to increased employee turnover costs which are heavy on the wallet. But, goodwill and reputation thus lost are incomparable. If you were part of the recruiting panel that took the effort to complete the employee’s hiring cycle, you'd be twitching with disappointment. Payroll processing is a responsible job. And while you may be great at juggling responsibilities, the slightest error in managing payroll will result in disdain and dismay on your staff's faces.

But, we have listed some great tips that will help you combat the usual payroll management problems:

  1. Always comply with applicable Laws and Regulations

    Tax regulations and labor laws can differ drastically from area to area. And it would be best if you stay up-to-date with these. Failure to comply with even one of these can have unforgiving repercussions. Innocent negligence or unfamiliarity can still lead to legal battles and penalties. Another scenario is when you decide to expand your business or shift shop to another location. If you migrate operations, technical and legal diversities may be absolutely contradictory to what you may have been accustomed to earlier. Maybe you're still headquartered in the same location, but what if an employee migrates to another branch? Do you follow the payroll laws at the headquarters or the actual location of work? And what if they're remotely working from another continent altogether? Which laws become applicable then? Not yielding to appropriate regulations can result in fines and loss of reputation. Therefore, ensure the payroll processing staff at your organization is well-acquainted with all applicable laws. They must constantly refresh their knowledge and stay updated and current to mitigate any legal risks.

    Learn how to simplify Payroll Processing!

  2. Conduct appropriate and relevant Payroll Management Training

    Many HR experts are already qualified in payroll management. But, payroll is handled (and mishandled) differently in every organization. While their expertise may be relevant to their previous organization, having your whole HR department trained together will ensure they’re all on the same page. This will assist in collaboration within the department and facilitate a more cohesive team approach. As a result, your payroll system becomes more effective through better allocation, decreasing the stress on your payroll staff. All this is favorable as you get a platform to streamline and discuss processes to arrive at a common conclusion and SOPs, leaving less room for error. Therefore, organizing a payroll management training class for your HR team can be a fruitful step toward effective payroll management.

  3. Maintain Transparency in the entire Payroll Process cycle

    Multiple disputes can occur when your employees are clueless about how payroll really functions. This can lead to dissatisfaction among staff and even result in employees leaving your company. Therefore, payroll must be as transparent as possible to gain the trust of your employees. You can achieve this by incorporating essential details such as your company's method and workflow of handling payroll, employee category, reporting accountabilities, availability & realization of paid and unpaid leaves, the appraisal & promotion process, etc. In addition, ensure you display these policies clearly and concisely, ensuring all your employees have effortless, on-demand access to these.

  4. Maintain an up-to-date Payroll Calendar

    A payroll calendar outlines the pay cycle's beginning and ending dates while marking dates for incentive payouts. It helps support Human Resource teams in organizing and maintaining payroll service functions by access to verifiable data. Creating payroll calendars is not challenging as multiple payroll software are available nowadays. You can opt for entirely automated and hybrid ones or even manually keep a tab of this vital information on spreadsheets. In addition, you can color-code calendar sections, adding reminders and notifications against events, targets, and deadlines. A compelling payroll calendar would emphasize cut-off dates for salary computation, reimbursements, and incentives throughout the year and, in turn, lessen the chaos and arbitrariness that would have been present otherwise. Depending on your platform of choice, you may also be able to notify your employees when they can anticipate their salaries and any past arrears.

    Also Read: What Are The Payroll Myths? Busting The Most Common Outsourcing Misconceptions

  5. Gather valuable Insights and Feedback

    Sure, you have done a great job with payroll management with that new calendar, HR L&D session, and exhibited policies for transparency. But that's just what you're assuming. Well, in all possibilities, you may be right. But, planning, strategizing, developing, and executing top-notch payroll management techniques may still have a leak that needs to be plugged. The only way to find out is through constant evaluation. Check the statistics and ask your staff to give you honest feedback. Sometimes, the gap lies in mere comprehension of policies and procedures. You may have the best of these in place, but if your employees haven't a clue, of what good is it then? Conducting periodic reviews and surveys can help you understand if and where these gaps exist. Your staff will thank you for this gesture because it displays empathy and concern. It proves you, as an employer, understand how essential and delicate payroll issues are and do all you can to ensure clarity, transparency, and proper management. Standing by such values helps garner loyalty and dedication from your employees. Most of your staff will willingly oblige, and participation in such topics is always 100% because it impacts everyone. This kind of participation can be clubbed with other team-building activities for a double impact.

  6. Consider outsourcing the Payroll Process

    Your time is your most valuable resource. If you are experiencing roadblocks or frequent lapses concerning payroll duties, it’s better to outsource this function. This can get some load off your shoulders while providing you with the opportunity to concentrate on other essential core tasks. Outsourcing payroll comes in numerous shapes and sizes. Payroll service providers allow you to be a part of the process and still be in control of everything through payroll software, offering varying degrees of control. Payroll service providers are experts at what they do. They understand state laws and taxation. They’re adept at these computations and ensure you adhere to the law with sufficient audit trails to back you. If you’ve been experiencing mishaps or stress in areas concerning payroll, maybe it’s time you consider outsourcing this task.

  7. Automate only certain or all of your Payroll Service Functions

    We live in a digital era, and IoT has enabled the automation of most business process functions. Instead of outsourcing payroll processes, you can just manage your own in-house software. The idea is to reduce the manual load, increase efficiency, and improve payroll processing TATs through one automated platform. HR Suites and enterprise solutions are advanced solutions that are the automated equivalent of outsourcing functions to an external HR service provider. Automated payroll can be calibrated as per your location, history, state laws, regulatory bodies, etc. They automate employee attendance and calculate overtime payments depending on variable slabs and increment levels as defined by the admin. It is undeniably faster and easier to have all this information pre-calculated and organized systematically where your team can access these to authorize payments instantly or as required.

  8. Documenting the Payroll Process

    Although it may appear as an unnecessary effort and additional cost, you must have all your information regarding payroll available and accessible for audits or any unforeseen circumstances. Apart from maintaining crisp records for auditing purposes, this practice helps track essential information that can be studied and analyzed for better planning. It allows HR to conduct regular reviews, clarify their positions, reinforce responsibilities, and plug all areas of concern. Sometimes, a company's leadership undergoes a drastic change, and resolving issues can become a massive task if proper documentation is not maintained from the beginning. It's a good idea to have all past payroll records stretching beyond employee separation and change of management. However, if you're struggling to backtrack data, at least insist on the last decade's worth of trails, which is the bare minimum.

    Payroll Management can be really easy.

Exela HR Solutions is a world leader in delivering end-to-end HR services, from recruitment and global payroll processing to HRBP services. We’re here for all your payroll needs. Whether you’re a startup, an MNC, or a conglomerate, we have HR software and solutions for businesses of all types and sizes. So, get in touch with us today if you need help with payroll or any other HR function.

DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.


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