Advantages of online payroll management tools
As the name suggests, online payroll management is a system of managing your business's payroll online. In 2023, where you're paying for tomatoes in India by scanning a QR code that's been set up on the road using nothing more than a phone and an internet connection, it is pretty easy to list all the ways the internet and cloud-based software have made our life easy. When it has provided so many applications to improve the everyday routine of the average Joe, just imagine the myriad ways in which it would improve a business's efficiency.
Other than the fact that it is easily accessible from any gadget with a working internet connection, at anytime, from anywhere, it also saves you a lot of time, auto-saves unfinished work so you can pick up where you left off the next day, and so much more. Let us see how these benefits apply to online payroll management particularly.
Efficiency of payroll software
An American university discovered that, on average, 88% of spreadsheets have 1% or more errors in their formulae. This is staggering. Now, place this statistic in the context of processing payroll. You use a spreadsheet to manually type out the names of all your employees in column A and use columns B, C, etc., to enter their basic pay, HRA, and so on until you arrive at their net pay at the end of the row. You manually do a bank transfer at the end of the month for this amount. A single error in any one of the columns could be catastrophic.
This also factors in you processing their proofs of investment for tax calculation, reimbursement claims, and the like without your employees having access to this payroll data once they submit it to you. The salary, as a mere number, changes from employee to employee by a wide margin. There's also the task of issuing Form 16s to them and uploading Form 24Qs to government portals with stringent specifications about file formats, size specifications, and other requirements. Whenever there is a change in a law, like the percentage of statutory deductions, you need to go back to your sheet and update it manually. This list doesn't even cover the tip of the iceberg of processing a successful pay run, but you get the gist.
Zoho Payroll is an online payroll management application that simplifies the whole process of a pay run. It has built-in salary templates so new business owners get a headstart in processing their first pay cycle. It also has powerful automation capabilities that let you directly deposit money into your employees' bank accounts without any manual intervention thereby streamlining the whole process. It also helps keep everyone on the same page by providing access to all relevant stakeholders based on the level of authorization they have. It also keeps you automatically compliant with all relevant statutes so you don't have to worry about them.
Vedatya, an educational institute that uses Zoho Payroll, says they have saved a whopping 54 hours per month on proof collection and validation using Zoho Payroll. This is a great example of how businesses that you'd think have no need for online financial tools can adopt a software to optimize their business processes.
Most cloud payroll software vendors offer a free plan that cover all the payroll needs for any small to medium business. Zoho Payroll's free plan is one of the most comprehensive payroll products out there. It covers every SMB's payroll needs and does it for free.
Say a director that has been with your company for over seven years and a fresher that has worked three months ago have the same name and hand in their notice on the same day. Your overworked and tired payroll admin processes their full and final settlement. He calculates the ex-director's gratuity and final salary amount, and very promptly transfers it to the fresher that just left the company by mistake. All of a sudden, the employee who was expecting to see a small amount in their account now sees a much larger amount.
Although this is an exaggeration that rarely happens, it illustrates just how important it is to keep solid checks in place whenever money is concerned. This is why bespoke software and its automation capabilities are needed. Zoho Payroll has internal checks built into the program to specifically ensure these types of mistakes never happen and that your business doesn't lose money.
Considering the example, it's clear that the smallest of manual oversights in the process of creating a pay run could cost you catastrophically. Investing $0 in what is essentially an extremely cost-effective and powerful payroll tool that can scale up along with your company might be one of the best payroll process decisions you'll ever make.
Backup and security
In a domain as sensitive as payroll, the importance of properly backing up your data and protecting it cannot be emphasized enough. You've got your employees' PAN numbers, bank account information, salary details, your organization's TAN, and similar data. We don't have to get too creative to imagine what would happen if one (or all) of these details were to end up with the wrong people. Some sage advice: Choose a provider that surpasses industry standards when it comes to privacy. Zoho comes with GDPR, AICPA, and SOC certifications so you know you can't go wrong with Zoho Payroll when it comes to data protection.
With just an ID and a password you can gain access to your data from anywhere in the world. No need to be physically present at an office. You can just as easily give access to anyone that needs it. Some online payroll management applications, like Zoho Payroll, let you add users and assign roles to them so you can limit the extent of their access to your payroll data. In this way, the CEO, payroll admin, and accountant can all see what they need to see to do their work. Inviting them to access your account is an easy task through the power of the cloud. Just add their email address and they're in.
Employee self-service portal
This is probably one of the most unique features that online payroll management software provide. Let your employees see their pay slips, Form 16s, IT declarations, proofs of investment, and more in one place from anywhere in the world through an employee portal. Send out a pre written email to invite them to their portal and give them agency over their payroll information. In this way, your HR department's work is also reduced and simplified with employees submitting their reimbursement claims on their own. No need to ask HR for forms when you can just get them from employees instead.
Compliance is one of the core USPs that cloud payroll software vendors have to offer. Say the government lifts the income tax slab for paying 0 in taxes from 5 lakhs to 10 lakhs. This is going to cause so much of mayhem for your payroll admins that are using outdated legacy systems to process your payroll. If you're using a cloud payroll software application, you don't have to worry about this or any other update to the law because engineers will be working on updates constantly on the backend so you can relax and process pay cycles without unnecessary hassle. In this way, online payroll software apps automatically help you stay compliant with the relevant region's tax laws. This is crucial because laws about any domain are complex and ever-changing, but laws about income and taxation (as you probably already know) are unbelievably tough. When you have the option to let a software do it right, why would you risk doing it wrong?
Say you've forgotten the login credentials. Just send an email to your online payroll management provider's support team and have your database opened for you in a matter of minutes. (Pro tip: Make sure you choose a software provider with excellent customer service because, as all businesses already know, it is worth paying a premium to have reliable product experts available to solve your problems.) Zoho Payroll is renowned for its customer service and dedication towards user education. Get a free demo today to see what we mean when we say we stay with you every step of the way until you master the product.
The final word
Cloud payroll software is here to stay. Its global market size is predicted to reach double digit billions (in USD) by 2027, according to MarketWatch. Get a head start by investing in a great payroll management system and get ahead of the lot.
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