Making sure that your employees get paid is one of the most important parts of running a business or being a small business owner. Some companies handle their own payroll processing in-house, while others prefer outsourcing it to a payroll provider.
Traditionally, running payroll has involved a series of manual processes such as data entry, timesheet verification, tax withholding, and payroll calculations.
Modern payroll automation software helps you eliminate the most time-consuming tasks associated with manual payroll processing. By using software to streamline your payroll process, you can save time, reduce human error, and improve recordkeeping.
What Is Payroll Automation?
Payroll is the process by which a business pays its employees — usually on a weekly or biweekly basis. It includes everything from verifying timesheets to withholding taxes and issuing direct deposits or paychecks. Payroll automation refers to the use of software to reduce or eliminate the need for human intervention in the payroll process.
Automated payroll software can facilitate everything from timekeeping, bookkeeping, employee benefits administration, and even tax filing. Payroll software solutions help you process payroll more efficiently by storing employee data, calculating employee wages, sending out pay stubs, and maintaining accurate payroll records.
Depending on your business needs, you may decide to automate some payroll tasks or the entire payroll management workflow. You can also integrate your payroll automation software with other human resources automation tools, such as your leave of absence management platform, to facilitate time tracking, paid time off (PTO), and more.
5 Benefits of Payroll Automation
Payroll automation is one of those rare business practices that benefits everyone: your employees, your accounting team, and your company as a whole. Here are five ways that automating payroll functions can make life easier for your entire organization.
Saves time and money
First, payroll automation can lead to significant time savings. Instead of spending time and energy on manual data entry, your team can focus on higher-level HR processes, like new hire onboarding and employee engagement. Plus, you can save money by reducing operating costs and eliminating time-consuming payroll functions.
Reduces human error
Tracking billable hours, verifying timesheets, and calculating payroll taxes — these parts of the payroll process provide plenty of opportunity for human error. While an automated system won’t eliminate mistakes entirely, it’s significantly more accurate than traditional time cards and even cloud-based spreadsheets. Payroll automation software can spot errors in real-time so you don’t have to go back and fix them later.
Ensures compliance
In today’s world of remote work and cross-border business operations, running payroll can be especially complex. If you have employees in multiple states or countries, you’ll need to comply with multiple tax laws and global payroll processing guidelines. Payroll automation software helps you comply with the IRS and other regulatory bodies.
Improves employee experience
Payroll automation can increase employee retention by ensuring that your employees get paid promptly and accurately. By providing an employee self-service portal, they can view their pay stubs online and update their employee information so they don’t have to wait for their paycheck in the mail or chase down your HR team to report an issue.
Supports business growth
Finally, automating payroll makes it easier to scale your business. With manual payroll processing, every new employee means more work for your accounting team. With an automated system, you can onboard new employees with ease and generate payroll reports to keep track of your expanding workforce.
Key Features of Payroll Automation Software
What features should you look for in a payroll automation system? While your business needs may vary, these features form a key part of payroll management software:
Time tracking
Your payroll automation software should include time tracking features or integrate with third-party time-tracking software. Tracking employee attendance is key to paying them accurately, tracking absences and overtime, and calculating accrued leave balances.
Tax withholding
Processing payroll involves calculating payroll taxes and withholding the correct amount from your employee’s paycheck. Your payroll system needs to be able to calculate state and federal taxes and provide accurate tax forms at the end of the year. More complex business structures may require additional tax management services.
Direct deposits
As physical checks lose their importance, many employees prefer to get paid by direct deposit and receive their pay stubs digitally. Along with standard direct deposits, you may want the ability to issue same-day deposits for time-sensitive payments.
Leave of absence
Whenever an employee takes a leave of absence, it affects the payroll process. A leave of absence can be either paid or unpaid, and it may draw from an employee’s sick leave or paid-time-off (PTO) balance. By integrating your payroll automation system with your LOA software, you’ll ensure that your payroll data is up-to-date and accurate.
How to Implement Payroll Automation
Setting up an automated payroll system can take some effort, but ultimately it can be more effective than outsourcing the job to a third-party payroll service. Follow these three steps to choose an automated payroll system and get it up and running.
Choose the right software
There’s no such thing as a one-size-fits-all payroll platform. In fact, customization is key. Payroll solutions vary widely when it comes to pricing, capabilities, and ease of use, so look for one that has all of the features you need and will be easy to implement.
Most automated payroll solutions are cloud-based, which means you can roll them out across your entire organization and access payroll data from any work location.
Tools like Pulpstream support everything from attendance tracking to leave of absence management, helping you embark on a digital transformation of your business without having to learn how to code or invest in new hardware.
Set up integrations with other HR software
Payroll processing systems aren’t standalone tools: They need to be compatible with other tools like your leave management system and bookkeeping system. Otherwise, you’ll end up with data silos, requiring you to manually share data between systems, and increasing the risk of incomplete payroll records or duplicate information.
When rolling out a new payroll system, be sure to import existing employee data and connect your new system to the tools you’re already using.
Pulpstream offers seamless integrations with dozens of platforms, including document management tools like DocuSign, HR software like Workday, payroll services like ADP, and CRM platforms like Salesforce. Connect multiple systems using an API to transfer data automatically and reduce the need for manual data entry.
Empower employees with a self-service portal
To make the most of your payroll automation system, set up an employee self-service portal so employees can log in online and provide or update their banking information and other relevant details. New hires can fill out key onboarding documents like tax forms and direct deposit forms, while existing employees can view their pay stubs, check their accrued leave balance, and submit leave of absence requests.
Providing a self-service portal helps you keep employee data secure and reduces the workload for your HR team. Both your employees and their managers will have easy access to timesheets and payroll records so they can resolve any discrepancies.
Facilitate Payroll Processing with Pulpstream
Payroll automation involves the use of software solutions to reduce or eliminate manual tasks from the payroll process, making it more accurate and efficient. Payroll automation tools can handle everything from time tracking to leave of absence management, and can help you ensure accurate tax withholding and HR compliance.
Cloud-based HR platforms like Pulpstream go one step further by providing an online portal that employees can use to resolve their own payroll issues. From filling out new hire paperwork to updating their bank account details, employees can ensure they get paid in a timely manner, increasing employee retention and engagement.
Request a demo today to see Pulpstream in action and learn more!
