Cost of Manual Payroll Process

Seven Ways Using Manual Payroll Processes Is Hurting Your Business

If you’re still using manual processes to manage your payroll, chances are, you’ve most likely had some ask “why?”. Maybe you just don’t feel like investing in payroll software. Perhaps you’re not sure if you can trust a computer to manage your finances, or possibly you just don’t want to take the time to implement a new payroll management system. Whatever your reason is, the truth is you stand to benefit a lot by switching over to a digital system, even if the implementation process is a slight inconvenience. Of course, if you’re not convinced just yet (and if you haven’t switched yet, we assume you’re not!), here are seven undeniable disadvantages of using manual payroll processes instead of a software-based approach for your payroll.

1. Manual Processes Are Inefficient

Managing payroll by yourself requires hours of effort each week, taking time away from other valuable tasks that you could be doing instead. If you want to maximize the potential of your business, it’s important to allocate your time wisely, and chances are, there’s something more beneficial you could be doing rather than payroll calculations. Fortunately, once you make the switch to using software, payroll will only take minutes, rather than hours, of your time each week.

2. They’re Prone to Errors

Even the most accurate of individuals make errors from time to time. Unfortunately, this is especially detrimental if you’re using manual processes to manage your payroll, since the entire payroll may have to be re-calculated by hand. You won’t have this issue with payroll management software; the system accurately calculates employee gross income, applies the applicable taxes/deductions, and computes individual paychecks correctly the first time!

3. They Take Too Long to Calculate

Simple gross income calculations may not take long to determine, but once you factor in federal, state, and local taxes alongside individual deductions (both voluntary and non-voluntary), it quickly becomes obvious that payroll calculations are not a transient task. The problem worsens as you onboard more employees, making expansion efforts hinder your business, not help it. However, since payroll software automatically calculates your payroll as the T&A information comes in, you’ll never have to worry about getting behind or becoming overwhelmed with a long list of payroll calculations.

4. Tax Laws Change

Federal tax laws change from time to time, but so do state and local taxes. Unfortunately, not being aware of these changes isn’t an appropriate excuse for any tax authority, so you will be held accountable and possibly even fined should you make a mistake. Online payroll platforms are constantly updated with the latest tax laws, meaning you’ll never have to worry about applying the incorrect rates (or the fines that come along with these miscalculations).

5. Remote Employees Have Different Tax Laws

Keeping track of changes to your local tax laws is complicated enough, but if you employ remote workers, you’ll need to keep track of their local tax laws as well. If you’re calculating payroll manually then this process quickly becomes time-consuming, as you must research all the relevant jurisdictions and their various tax laws to ensure that you’re computing all applicable taxes. However, this won’t be a problem if you use an online payroll platform since the system already has the latest tax information and will apply it on a per-employee basis.

6. You Have to Handle Payroll Distribution Yourself

After performing all the necessary payroll calculations to make sure each employee is properly compensated, you’ll still need to distribute a paycheck to every employee. If you only employ a few workers and pay them via check then you may be able to get by with this approach, but once your business expands and you start paying them via direct deposit, the manual approach quickly becomes impractical (and time-consuming!). Online payroll systems such as UZIO can handle this for you, distributing paychecks automatically on your behalf. 

7. Employees Don’t Have a Self-Service Option

If you manage your payroll manually, employees will have to come to you directly if they have any questions about their paycheck, past or present. This can present an issue if you have a particularly curious staff, but as their employer, it’s your responsibility to answer any questions regarding their paychecks. Tending to every question personally can quickly become overwhelming, but that’s where online payroll software can help. By providing an online portal complete with all of their payroll and benefits information, employees can find the answers to their questions on their own, lessening the number of questions you have to answer personally.
Of course, this is not a complete list of the benefits that using payroll management software can provide, but it’s certainly a start! For a more in-depth look at the specific features and benefits of using an online payroll platform, click here!

Also, you can consider reading about: Top Five Business Analytics Tool Your Company Needs!

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