As the name sounds, Payroll management is all about managing the data related to Payroll but before proceeding further; let’s try to understand, what this payroll word actually means!
“Payroll” initially meant the total workforce of an organization but with time its meaning got diversified with a wide range of definitions. Payroll is also termed as a process of paying an Employee for the total work/job; he/she has done for the Employer.
Payroll Management is basically an important part of Enterprise resource planning (ESP); which indeed is an integrated applications system and comes under back office functions; related to pay slip, salary statements, flexi benefit reports, Employee’s provident fund (PF) or Profession Tax, Employee’s insurance, other data or reports, Income tax or TDS etc.
It is an administrative process of managing employees’ salaries within any organization which includes calculating salaries and tax deductions of the total workforce or the employees, managing the retirement benefits as well as disbursing salaries to the employees, calculating the total allowances, organizing Employee’s salary structure, generating pay-slip for employees per month and calculating deductions, incorporating Tax planner lists and many more.
Since these are not-easy-to-do tasks, the HR (Human Resource) team takes help of the accounts team in taking care of all these matters.
Thus, Payroll management process can be bifurcated into 2 different but incomplete without each other departments or parts: Payroll accounting and Payroll administration.
One can manage the Payroll process either by in-house method or by outsourcing it to a third party.
Again the in-house or self built process can be completed either:
by manual method where the Payroll staffs put all the data related to Payroll of an organization manually and do all the calculations or
by an automated or computer based system where a software designed specifically for such Payroll management related jobs and are user friendly and also time efficient i.e. the software which does the Payroll management job is very fast and needs least manual assistance.
Considering the issues that one faces during Payroll Management, opting for the automated Management system is always preferred. Some of the issues are:
Calculations of taxes levied, making a record of all the Employees’ information, keeping track of employee benefits and all the pay codes, managing pay rates, garnishing the wages and the most important part- Checking for the fraudulent activity, if any.
Benefits of using an automated Payroll management system over the conventional one are many. Some of them are:
A computer based Payroll management Software helps you do all the lengthy jobs easily and in a short span of time.
Through this system, you can always check important details such as pay slip details, pay bill history and summary. New pay slips can be created too. All of these can be done with just a click.
Each and every detail such as gross or net salary of the Employee, daily attendance etc, can be retrieved, if in case it gets lost because of its data base management system.