Payroll is an intricate function that requires both experience and expertise. Besides salary calculation and disbursement, the department also needs to take care of tax responsibilities which is extremely time-consuming and complicated. This is why businesses have come to favour the expertise of a professional payroll outsourcing provider.
Some Significant Payroll Challenges Faced by Businesses in General
It is only when we face challenges that we look for its solution. The payroll process in India is not easy and comes with it its own set of problems. While some may vary from business-to-business others may be common to all. Here is a list of some common challenges faced by businesses:
1. Problems of Statutory Compliance and Legislation
One of the biggest challenges that payroll processing of any business faces is staying compliant. State regulations, statutory compliances, labour laws, etc., are some legislations that needs to be followed. Moreover, these laws are not just intricate, but they also tend to be revised regularly. The smallest error can result in penalties and fines.
2. Ever-Evolving Technology
One of the biggest challenges businesses face globally is technology, evolving at an immensely fast pace. For example, payroll comprises complicated calculations or wages, taxes, and more. Following the old ways and using sluggish technology makes way for various issues, including errors in entries, erroneous tax filings, data security issues, data storage problems, etc.
Payroll process in India is not as simple as it sounds. There are different types of employees in a business – temporary, permanent, who works for limited shifts, remote work, etc. In addition, all employees may not be eligible for benefits, and their salary calculations may be different. Moreover, businesses are reinventing their product lines, requiring HR to undertake various tasks that may not leave them time for intricate payroll calculations. Payroll management solutions can help in addressing all these problems.
4. Challenges in Leave & Attendance Management
Finger-print punches or other manual ways track employee attendance in several businesses by entering one’s names. Calculating salary, incentives, etc., is extremely difficult when the data has to be imported manually in worksheets. Not to forget this data has to go through several management levels before authorizing the final payment. It may also have to undergo managerial permissions or changes. Attendance and leave are daily operations, and errors are common when done manually.
5. Threat to Data Security
Cybercrimes and breaches are common, and without proper online protection, it isn’t easy to keep data and information safe. The payroll system comprises a lot of data, including personal details of the employees, bank details, and more. It may not be possible for small and medium businesses to deploy the required security systems to ensure their data is safe and protected. A payroll outsourcing provider is well-equipped with the latest technologies that provide secure data storage and security.
6. High Cost
There are several areas in which payroll systems can incur high costs, including hiring dedicated employees to manage payroll systems, deploying software, maintenance of software, upgrading it, and more. Outsourcing to a payroll outsourcing provider can help in avoiding these costs.
What are the Advantages of Outsourcing Payroll Services?
Learn about some common benefits of hiring a payroll outsourcing provider and how different areas of your business may benefit from this approach.
1. Potential time saved
The Payroll process in India demands attention, which comes at the cost of precious time that could give to overseeing concerning areas of business. Many activities come under payroll, from calculating wages to generating reports and disbursing the wages in the accounts to remitting taxes and returns (payroll). All this is time taking as it is a continuous cycle. Once payroll management is handed over to a reliable payroll outsourcing provider, the employees and the employer can focus on more pressing things in their business.
2. Reduces Payroll Errors
Erroneous entries lead to inaccurate salary disbursements, false tax filings, and more. This can be annoying for the employees and may prove costly as they may have to pay heavy fines for filing wrong taxes. Employers are also legally responsible for filing inaccurate reports. Improper pay rates missed hours all tend to decrease the employees’ pay and may cause dissatisfaction among them. On the other hand, if calculations go wrong, it may also cause disbursal of more salary, which is a loss to the employer. Considering all this, processing payroll may turn out to be an expensive affair in the long run. Hiring a payroll outsourcing provider may save you both money and from legal obligations.
3. Better Security of Payroll Data
Meddling with company records for personal benefit, data theft, embezzlement, identity theft, etc., are some potential risks of payroll management. A payroll outsourcing provider offers a safer haven for confidential data. They work with advanced systems to protect and store data, multiple server locations, and reliable backup.
4. Compliance with Government Regulations
Every operational business understands the significance of staying compliant. Tracking employee work hours, holidays, benefits, etc., can lead to inaccuracies. Furthermore, understanding employee deductions, local/federal/state taxes, and other programs (pertaining to labour law of that specific country) is a challenging job. Before the employees are paid their salaries, the taxes should be accurately set up. Payroll management solutions can help in streamlining the payroll information and the related processes. Having a payroll service provider responsible ensures timely tax filing requirements and meets payroll accuracy. The employer feels more confident when the business stays up to date with regulations. Moreover, government rules and regulations are capricious and since staying updated with the changes is an obligation, it is only wise that a payroll service provider takes care of your payroll management services.
5. Payroll Expertise
A professional payroll outsourcing provider employs individuals who are experts in payroll management. These individuals are experts in the intricacies of payroll processing and taxes, along with government rules and regulations. They offer a guarantee on their services. Some of the processes where you get the expertise of payroll providers to include:
- Knowledge of rules and regulations and integration with payroll deductions
- Calculating and submitting quarterly and year-end taxes related to payroll
- Updating various forms (depending on the country), accurate tax calculation and deductions
- Taking care of voluntary and involuntary employee withholdings and submitting them to the required benefits programs or government entities
- They track employee benefits eligibility dates and process benefits enrolments.
- They update tax guidelines to ensure compliance. They also adjust payroll figures as required.
- Payroll specialists are also experts in verifying accurate data, locating mistakes, and correcting them before they process salaries or file for taxes.
6. Integrated Payroll and Benefits data
Businesses offer various benefits to their employees, and some contributions are deducted from the payroll. Different contribution amounts and multiple healthcare plans can be difficult, especially when these contributions are impacted by other factors such as part-timers or full-time, their salary, married or unmarried, etc. Outsourcing to a payroll management solutions provider can ensure that all deductions are aligned to the regulatory guidelines and there is an uninterrupted flow of payments made to providers to ensure the benefit coverage for the employees is active.
Employers have experienced an increased level of satisfaction amongst employees when they are provided with a self-service option. An integrated payroll platform saves both cost and money as it allows the employees to take care of many small tasks such as:
- Submitting leave requests or changes in shifts
- Preview their salary information and access payslips
- Print tax documents
- Update benefits and tax allowance forms
- Update their personal information
Outsourcing these key business functions can help in saving the time of the HR team.
How Can TopSource Worldwide Deal with Payroll Problems and Reduce Errors?
At TopSource Worldwide, we believe in providing our clients with an array of payroll outsourcing services that will help their business in easy payroll management. Here is what we can offer to your business:
- Fully managed payroll service
- Payslips, banking upload, variation reports, and full and final settlements
- Standard and bespoke reports for finance e-TDS and statutory returns filing for PF, ESIC, PT, LWF – PAN India
- Generation of investment proof verification and Form 16/ 12BA
- Calculation of bonus, ex-gratia, overtime, leave encashment, and gratuity
- Loans and advances tracking and EMI deductions
- Calculation of arrears
Employee Self Service
- Secured tiered access
- Payslips, IT declarations, IT reports, and Form 16s
- Payroll reimbursements
- Online helpdesk
- Reports that can be accessed only by HR/Finance managers
We have experience of working with different types of industries and have an exhaustive list of satisfied clients across the world. To learn more about our services you can get in touch with us on the below mentioned contact details.