Where there are humans, there is the chance of human error
Payroll is an essential system within your business. How it works, particularly how accurate it is, can have a direct impact on your bottom line. Inaccuracy will cost you money. And this can be magnified for small businesses where every penny counts.
Issues with Manual Payroll Systems
While there are several challenges in dealing with manual payroll systems, a 2020 survey conducted by the Global Payroll Management Institute entitled “Getting the World Paid” shows 44% of respondents identified HR data inputs as the biggest threat to payroll accuracy. This is easy enough to believe. Any input done manually is prone to error. Mistakes can happen, even with the best HR and finance teams. Manual entry increases the risk of human error – typos, bad cut & pastes, etc. – which can result in incorrect information causing things like delayed employee payments and possible overpayments. And that will cost you. Let’s break it down.
If you have 30 employees working 5 days per week, that’s 150 time cards a week, checking roughly 750 entries – ENTRY, BREAK, MEAL, BREAK, MEAL.
If you have even a 2% miscalculation each payroll period of 2 weeks, you’re looking at 6 miscalculations. If you miscalculate 1 hour each, that is 6 hours of financial loss. And this doesn’t include the time spent tracking the error down, or the employee frustration bringing it to your attention. These losses are real and over an extended period can be significant to a small business.
So take the humans out of the equation
To help avoid this and other payroll problems, many businesses are implementing payroll automation software. When you automate repetitive tasks, you save time on tedious manual inputs and get rid of the likelihood of human error as the software takes over the process. And, truth be told, while this task does fall under HRs purview, there are much better ways that trained HR professionals can be using their time than on data input. Take this task off their plate and they will thank you.
Automated payroll software provides other benefits besides accuracy and increased HR productivity. It can also help reduce compliance mistakes. For example, an automated payroll system reduces the risk of an employee being incorrectly categorized or having an incorrect amount of tax money withheld. Mistakes in compliance can lead to fines and penalties against the company. Automated payroll systems can also increase information security. Payroll includes sensitive employee information. Maintaining privacy and guarding against data leaks is much more difficult when payroll is being managed manually. Automating payroll not only helps ensure its accuracy, but also increases the security of important employee information.
At Time Well Scheduled, we have the automated solutions to help you find payroll accuracy and save time and money. Contact us today.