How Payroll Automation Can Save Your Company Time and Money

The role of Payroll Professionals is becoming increasingly challenging. The regulatory environment continues to become more complex and the increasing number of employees working remotely from different states means there are more regulations to stay on top of.

Companies are increasingly turning to automated payroll processes to stay in

compliance without having to increase their department’s headcount. Increased automation can help companies save both time and money, while also improving reporting, compliance, transparency, and employee satisfaction.

Businessman putting a paycheck in their pocket

Benefits of Payroll Automation for your Business

There are numerous benefits to automating your payroll process. Here are some of the biggest ones to consider.

Improved Reporting

Payroll automation systems can be connected to solutions such as Power BI to provide real-time insights into payroll data. This allows employees to see their pay information, including taxes and deductions, and managers to track overtime and other payroll expenses. This level of transparency ensures that employees are paid accurately and on time, while also giving managers the information they need to make informed decisions about staffing and budgeting.

Save Time and Money

Automating payroll can save companies time and money by reducing the need for manual data entry and processing. This means that employees can focus on other tasks that add value to the company, while also reducing the risk of errors and delays in payroll processing. In addition, payroll automation systems can be customized to meet the specific needs of a company, allowing for greater efficiency and cost savings.

Improved Compliance

Newer systems designed to keep up with changing regulations and compliance requirements. They will also be able to better track employee withholdings and include specific reports for easier tax filing. Some will even do the filing for you for an additional cost. These features ensure that companies stay in compliance with all applicable laws and regulations, avoiding costly fines and penalties.

In some cases, these systems can also help companies identify potential compliance issues before they become problems, allowing for proactive management and prevention of issues. They will

Reduction of Payroll Errors

One of the most significant benefits of payroll automation is the reduction of errors in the payroll process. In fact, errors in payroll can be costly for businesses, leading to fines, penalties, employee distrust, and even legal issues. Here are the three most common types of payroll errors and their causes.

Incorrect Employee Information: One of the most common causes of payroll errors is incorrect employee information. This can include incorrect employee names, social security numbers, or addresses. Such mistakes often occur due to manual data entry errors or outdated employee information.

Incorrect Calculations: Another common cause of payroll errors is incorrect calculations. This may occur when employees are incorrectly paid for overtime, bonuses, or commissions. These errors can be costly to businesses, and they usually occur due to manual data entry errors or a lack of understanding of the payroll system.

Late Payments: Late payments can be frustrating for employees and may cause them to lose trust in your company. Even worse they can lead to lawsuits and hefty fines, especially in states such as California. Late payments often result from manual data entry errors, a lack of organization in the payroll process, or a failure by management to notify the payroll team of a termination in a timely manner.

Employees Need to Pay Bills and Need to be Paid on Time

How can Payroll Automation Save Your Team Time?

Beyond the benefits for your organization to embrace payroll automation, there are many immediate benefits for the payroll team itself. Imagine most of the manual processes that currently occur in Excel taking significantly less time, and with a reduction in errors there is less re-work and necessity to put out fires.

By introducing payroll automation, even in a limited capacity you will begin a virtuous cycle where you can spend more time preempting mistakes, and less time fixing them.

Eliminate Large Amounts of Data Entry: Not only is data entry time consuming for your team, it’s also a common cause of payroll errors. Many modern payroll systems push the data entry tasks back to employees as new hires and puts the responsibility of correctly entering information in their hands.

Faster and accurate calculations: With an automated payroll system, you can input employee data and other payroll-related information quickly and accurately. The system will calculate employee salaries, taxes, and other deductions in real-time, saving you the effort of manual calculations and reducing the likelihood of errors.

Streamlined workflows: Automating the payroll process can streamline workflows, reducing the time spent on manual tasks. For instance, the system can generate paychecks and direct deposit funds automatically, saving time on printing, signing, and distributing paychecks.

Improved data security: By automating the payroll process, you can store employee data, payroll transactions, and tax reports securely in the system. This can reduce the risk of data breaches and save time on managing and safeguard.

Is Your Organization Ready for Payroll Automation?

While payroll automation offers numerous benefits, it’s important to assess whether your company is ready for this change. Here are some factors to consider.

Complexity of Payroll: If your company has a simple payroll structure with only a few employees, manual processing may be sufficient. However, if your payroll involves multiple departments, varying pay rates, and complex tax calculations, automation can save you time and reduce errors.

Budget: Payroll automation systems can vary in cost depending on the level of customization and features. Consider your budget and whether the investment in automation will provide a return on investment.

Employee Buy-In: One of the most crucial factors in determining readiness for payroll automation is employee buy-in. Your employees must be willing to adapt to a new system and embrace the benefits it offers. Communication and training are key to ensuring a smooth transition.

Compliance Requirements: Consider the compliance requirements for your industry and whether an automated system can help you stay in compliance.

Once you’ve assessed these factors, you can determine whether your organization is ready for payroll automation. Keep in mind that employee buy-in is critical to the success of any automation initiative. Engage your employees early in the process and communicate the benefits of the new system. Provide training and support to ensure a smooth transition.

Does your Company Need Upgraded Payroll Software?

Upgrading to a new payroll system or provider can bring many benefits, such as increased efficiency, accuracy, and compliance with regulations. If you’re on an antiquated system, a full upgrade may be the quickest way to get all of the modern features and benefits that your company needs.

However, it’s important to consider the challenges and drawbacks before making the switch.

Computer Software Updating

Challenges of Implementing New Payroll Software

One challenge is the cost of implementing a new system, including the cost of software, hardware, and training. The transition process will be incredibly time-consuming for your team and can at worst be highly disruptive to normal business operations. Especially if there are last minute challenges or the system is not implemented correctly.

The second drawback is the need for your team and employees to adapt to a new system and processes. Even by providing comprehensive training and support, there will be many employees who will be confused and frustrated by a change in process.

Third, there is the risk of data loss or errors during the transition process. Data needs to be transferred from the old system to the new system. This often includes a mapping process and some limitations of how many years of data can be brought forward. The challenge of accurately transitioning data between systems cannot be understated. Even payroll companies that routinely support transitioning to their platform can struggle.

Despite these challenges, upgrading to a new payroll system or provider can ultimately lead to a more efficient and streamlined payroll process, saving time and resources in the long run. By carefully considering the benefits and drawbacks and taking steps to mitigate risks, accounting professionals can make an informed decision about whether to upgrade their payroll system.

Benefits of Implementing New Payroll Software

If you can overcome the initial challenges of implementing a new system, there are many great benefits that your business will be able to take advantage of. These are some of the biggest benefits of a new system.

Cloud-Based Payroll Systems: Cloud-based payroll systems offer the flexibility of remote access and automatic updates, eliminating the need for manual software updates. These systems can also offer integrations with other software systems, making payroll processing more efficient and error-free.

Cross-System Integrations: The benefits of integrating systems can be astounding. It eliminates a lot of work typing information from one system into another. It also eliminates the possibility of data entry errors that could cause incorrect payments.

However, even the best systems require some setup and getting the integrations to work appropriately may not be as easy as a sales representative makes it sound on an introductory sales call. The Accounting Software or ERP system that your company uses can have a big impact on integrations. It’s recommended that you research your specific ERP integration prior to moving forward with the final selection of a payroll software.

Approval Routings: Approval routings help streamline the approval process for payroll-related transactions such as salary increases and bonuses. With approval routings, requests are automatically sent to the appropriate parties, reducing the time and effort required for manual approval. It also takes the payroll team out of the unenvious job of making sure that approvals have been signed off on to a role where they can report on the status of pending changes and send reminders to the appropriate managers, or even automate the reminders.

Digital Document Tracking: Digital document tracking allows payroll professionals to track and manage employee documents such as W-4 forms and direct deposit information. This helps ensure that all necessary documentation is received, recorded accurately, and readily available in case it is needed for compliance or HR purposes.

Modern Payroll Processing Workflows: Payroll processing software automates the entire payroll process, from calculating employee pay to generating pay stubs and tax forms. This software can also integrate with other systems such as time and attendance and benefits administration for seamless processing.

Automating Payroll Without Expensive New Software

Upgrading from an existing payroll system to a new modern one might be the best-case scenario for your organization. However, it may not currently be the right time due to business conditions or other challenges. Luckily, Payroll Process Automation is in Reach for Companies of All Budgets.

Here are some ways that you can begin streamlining your payroll process with off the shelf solutions that can be made to work with most payroll processes.

Automate It

Approval Routings and Automations with Micrsoft Power Automate Flows: Power Automate Flows are offered as part of Microsoft 365 Enterprise licenses. Meaning that you likely already have this service available. The software allows you to build out online processes that connect different cloud software services together.

You can set them up to automatically send out approval requests to managers and keep track of who has returned them. They also allow you to send information to different systems, such as automatically downloading an e-mail sent to payroll and save it to a folder on SharePoint or your local network.

Automated Commission and Bonus Calculations with Alteryx

Commission Calculations have a way of being overly complicated. You can do a lot in Excel, but at some point, there may be too many employees to do this efficiently. Software solutions such as the Alteryx Analytics Platform allow businesses to consolidate data from a number of sources, such as spreadsheets, databases, or connect directly to an ERP. The data is run through a processing workflow which can be setup to output data into a format that can be uploaded into your current accounting software.

Alteryx can be a decent sized monetary investment for your organization. For companies on a budget, there are many ways to automate Excel Spreadsheets to start seeing the benefits of process automation today.

Use Low-Code Software Such as Microsoft Power Apps to Track Employee Requests

Wage increases, terminations, and errors in timekeeping are all common reasons that people reach out to the payroll team. In a high-volume environment, they can be difficult to keep track of. Microsoft Power Apps are Microsoft’s low-code solution that allows non-programmers to build out custom webforms and workflows. Forms can be built with these tools that will send e-mails to the payroll team and simultaneously record the request in a centralized database.

Forms can also be setup with data validation rules, so that pay raise requests have to be within a specific dollar amount or meet other criteria to avoid typo’s that prompt follow-up calls from the payroll team to an employee’s manager.

Learn more about Low-Code platforms here:

Best Low Code and No Code App Platforms for Business (

Implement a Ticketing System to Track Requests and Improve Recordkeeping

You’re likely familiar with ticketing systems used by IT departments to keep track of requests to fix broken computers and track network issues. The same technology can be used for payroll teams that may traditionally work off of a shared Outlook Inbox.

Utilizing a ticketing system can improve employee satisfaction by ensuring that they receive a timely response. They can also improve recordkeeping, so you don’t have to coordinate with coworkers to see a conversation history.

Many advanced ticketing systems also include the ability to deploy web forms, chat bots, and approval routings meaning that they can be a comprehensive solution to many of the problems that payroll teams face.

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