The worldwide pandemic has brought inefficiencies and difficulties, such as payroll and compliance challenges, that many companies were unprepared to face. Businesses must evolve quickly and implement processes and systems to stay up with the faster rate of change. This was true before the pandemic and has grown increasingly important in addressing existing issues that have only been amplified.
Organizations will be unable to grow or handle massive changes, including large-scale hiring to address new company requirements, regulatory changes, or system upgrades, unless they have the appropriate payroll technology. As some personnel continues operating remotely, antiquated technology and methods pose security risks.
According to the Payroll Benchmarking Report by Deloitte, the number of errors and the time it takes to fix them are two of the most crucial performance indicators of payroll performance. The time lost on payroll errors prevents payroll personnel from working on value-added, strategic programs and adds to the workload they already have.
Shifting from Transactional to Strategic Operations
Some firms today are still hampered by old methods and technologies. Those who worked with spreadsheet and manual data entries may have had the time in the past. Business leaders should start implementing advanced solutions and tools to sustainably develop their consumer base, enhance employee engagement, and drive continual business expansion.
In business operations, instead of viewing payroll as a task-oriented operational activity, organizations can use it to guide business choices such as staff composition and operational cost optimization. Understanding how to solve payroll problems and implementing more innovative solutions that are adaptable and capable of quickly adapting to socioeconomic situations is a crucial enabler for this change.
Payroll Operations Challenges and Solutions
Here are various payroll systems problems and solutions every company should understand.
Ensuring Precise and Timely Payroll Processing
Manual work, such as entering salary details while processing payroll, costs time that HR staff could better spend on more critical HR activities. Furthermore, it can lead to human mistakes.
As a result, many businesses have implemented modern computerized accounting system like Susan.one to automate payroll operations and streamline compliance, allowing their HR department to avoid manual labor and increase efficiency. It can, for example, assist HR professionals in automating the processes of validating payroll information to ensure employees are paid appropriately and on time and that tax remittances are computed correctly. What used to take hours is now completed in seconds.
Avoiding Under or Overpayments
Payroll errors that occur during traditional payroll processing affect not only the employee's compensation but also any deductibles and incentives that they may have. These errors can impact taxes, accrued expenses, pensions, and garnish wages.
Business leaders should address the payroll problems quickly by using accounting and payroll software to avoid employee anguish. Constant delays and filing mistakes can be time-consuming and costly, resulting in penalties and taxes.
Creating Efficient Data Management and Reporting System
Data management has traditionally been a significant barrier for international payroll teams, mainly due to concerns about data accuracy. The exchange of information between international human resources and the payroll system is necessary for both roles to work correctly. However, the data in their respective records systems are frequently out of sync, with lags in processing crucial changes like promotions, dismissals, and incentives resulting in data inconsistencies that necessitate comprehensive solutions and even supplementary runs. You would need tools for data analysis and management, like these examples of data analysis software.
Reporting is the second data difficulty. Compiling data from various payroll systems around the world takes time. Furthermore, because this is often a manual procedure, the obtained data may be missing, erroneous, or outdated before it is suitable for analysis. Data analysis and financial reporting expectations in every function have shifted, with corporate leaders now counting on real-time, reliable information to support decision-making. It's time to modernize payroll reporting.
The first step toward intelligent analytics and payroll reporting is to centralize and standardize your records by implementing payroll systems. Reports may be compiled from a single source rather than from multiple systems throughout your global operations, with a unified global payroll system. This centralization enables real-time reporting, which supports strategic decision-making. Ensuring constant accuracy of your information is also essential, aided by single-source file and self-service personnel data management and payroll systems.
Supporting Dispersed and Global Labor Force
The pandemic has called into question corporations' concept of which roles must be performed in person and which may be performed remotely. According to a Gartner survey, 82% of Chief Financial Officers and finance managers plan to employ remote work arrangements after COVID-19. Employees want this kind of working arrangement as well.
Organizations can more readily operate across borders as corporations and individuals normalize telecommuting and workflows become more digital. Global operations, on the other hand, bring new payroll issues because corporations must follow numerous regional statutory requirements.
The decentralized workforce will have to be paid appropriately and timely, regardless of where they work. This will not only help firms stay compliant, but it will also result in better employee engagement and retention. Furthermore, instead of aggregating data from separate systems across locations, centralizing payroll procedures and data to achieve simplified financial reporting across all active regions can help firms acquire a holistic view of payroll.
Accomplishing Global Compliance
Data protection and security are multifaceted, ever-changing challenges that all firms face today. Navigating changing regulations on a country-by-country premise while fulfilling employee expectations and maintaining the organization's vital payroll data might be complex, especially in the absence of a worldwide system to satisfy those objectives. Indeed, the pursuit of compliance has prevented some businesses from establishing a global presence entirely, letting go of many potential payroll benefits.
The main challenge is to track international compliance in real-time. After all, detecting noncompliance issues too late is useless, especially with various governing organizations waiting to impose fines and sanctions on you the instant you breach the rules.
Comprehensive knowledge of the country-specific labor regulations affecting your firm is critical. Therefore, bringing in specialists to assist is a wise step. Cloud technology's real-time record management features offer visibility to your payroll data and operations. This allows for better awareness of your level of compliance and centralized access to mandatory filings, and easier recordkeeping.
You can monitor and evaluate the effectiveness of your payroll processes using live compliance dashboards. A fully equipped cloud payroll software will also give consolidated compliance schedules with actionable deadlines and legislation monitoring services that will alert you to changes in local regulations.
Increasing worker financial stress
Employees require greater financial flexibility during upheaval and uncertainty; financial wellness is critical. According to the 2022 Wellness Barometer Survey on the condition of employee well-being, 72% of workers report feeling anxious about their finances, which hurts their physical and mental health and their ability to perform at work.
Financial stress among employees can significantly impact how well a company performs, leading to everything from disinterest and higher healthcare costs to an increase in sick days and attrition.
Organizations can offer on-demand pay options so staff members can access their earnings after their shift. Instead of receiving a loan or advance based on estimated earnings, employees receive an actual payday using on-demand pay technology, which bases pay on continuous income calculation.
Businesses can also use self-service systems to provide employees access to their payment details so they can check them and submit inquiries or complaints via a mobile app. Giving employees this visibility can increase employee-employer trust, which can help firms attract and keep talent.
Changing the Conventional Payroll Perspective
Organizations are under financial strain due to the economy, which drives them to change their objectives. To focus on sustainability and resilience, many firms hurriedly identify payroll problems and solutions by putting procedures and systems in place to help business operations while maintaining employee well-being at the forefront.
While the current crisis has caused many issues for businesses, it has also allowed business owners and executives to reconsider how payroll processing has been carried out and make investments in future solutions. Because the rate of change is only increasing, companies will have to be more prepared to manage these hurdles and any new challenges of payroll management that may emerge.