Many people dream of becoming entrepreneurs, and often the biggest...
Letting technology do the heavy lifting for certain monotonous tasks...
Choosing the right accounting method can significantly impact...
Bootstrapping—financing growth through internal cash flow—is a hallmark...
Unveiling the good and the bad about payroll tech.
December 17, 2023
With innovation as the ultimate catalyst for success, it’s no surprise that businesses are turning to automation to tackle business operations. One of them is payroll management, a complex but necessary task.
Automated payroll offers many benefits, from streamlining processes to maximizing accuracy. However, as with most technological advancements, it also comes with its own set of risks.
Organizations must weigh these pros and cons carefully to maximize this transformative tech.
One of the primary benefits of payroll automation is its ability to reduce costs. The American Payroll Association estimates that automation can reduce payroll processing costs by as much as 80%.
Automation frees your internal team from repetitive, manual payroll tasks, enabling them to focus on the role’s more complex and rewarding aspects, particularly those requiring problem-solving or human interaction.
Automated payroll solution minimizes the risk of errors associated with manual data entry and calculations. The software performs precise calculations based on predefined formulas and rules. As a result, the likelihood of human error decreases, which minimizes mistakes in salary calculations, payroll tax deductions, and other payroll-related calculations.
Technology completes payroll tasks faster and uses fewer resources than manual processes. At the same time, it helps reduce the risk of errors and delays in payments, which makes it easier for organizations to manage their payroll processes accurately and reliably.
Payroll automation systems come with built-in features that help protect sensitive employees. Through access controls and encryption techniques, it safeguards payroll data from unauthorized access or potential breaches. This minimizes the risk of data loss, theft, or tampering, ensuring the confidentiality and privacy of employee payroll information.
As more payroll tasks become automated, some jobs may become obsolete, and employees might become redundant in their current roles.
Automated payroll systems reduce the necessity for personal assistance or direct human interaction. However, some employees may prefer individual attention for payroll-related queries or issues. The lack of direct human support could lead to dissatisfaction among those seeking personalized assistance.
While payroll automation can lead to long-term cost savings, the initial investment required to implement automated systems can be significant. It involves expenses such as purchasing software, training employees, and restructuring processes. Due to these upfront costs, resource-limited small businesses may need help to adopt automation.
Automation has the power to make massive improvements in payroll processes and procedures, but it could be better. Use the above guide to understand this tech’s benefits and pitfalls to make an informed decision.
Want to know more about accounting and HR? In addition to HR, benefits, recruiting and payroll through its PeopleOps, Escalon’s Essential Business Services include FinOps (CFO services, taxes, bookkeeping and accounting) and Risk (business insurance). Talk to an expert today.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.
Our team is made up of seasoned professionals who bring years of industry experience to the table. You gain a trusted advisor who understands your business inside out.
Say goodbye to the hassles of hiring, training and managing in-house finance teams. You will never have to worry about unexpected leave of absence or retraining new employees.
Whether you’re a small business or a global powerhouse, our solutions scale with your needs. We eliminate inefficiencies, reduce costs and help you focus on growing your business.
Choosing the right accounting method can significantly impact how you track financial performance, manage taxes, and plan growth. Two common...
Bootstrapping—financing growth through internal cash flow—is a hallmark of many successful startups. But as businesses mature past their initial stage,...
In today’s business landscape, technology is more than a convenience—it’s a strategic asset that can supercharge growth. But as you...
The month-end close can feel like a perpetual scramble—collecting invoices, reconciling accounts, fixing last-minute errors. A drawn-out close not only...
Overhead costs—from utilities and rent to administrative staffing—can quietly swell until they erode profit margins and slow your ability to...
Growth triggers a tidal wave of financial complexity, multi-entity operations, new product lines, overseas expansion, or investor relations. If your...
Mergers and acquisitions (M&A) can dramatically alter a company’s trajectory—unlocking new markets, technologies, or customer bases. Yet, many deals stumble...
Working capital: The difference between your current assets and your current liabilities. It’s a key barometer of financial health. While...
Expanding your team and capabilities is critical to sustaining growth—but the question often arises: Should you build an in-house department...