People make mistakes; that is simply part of human nature. Sometimes making mistakes is how we learn. That said, even small mistakes can add up quickly when it comes to completing payroll, even for smaller teams. Such mistakes can keep employees from getting their hard-earned money on time, which will only lead to distrust and lower morale within the workplace.
Luckily, even though humans are fallible, payroll does not have to be prone to error. Through automated payroll, companies can rest assured that their payroll is correct every single time. Read on to learn more about the unique benefits of automated payroll and why more and more businesses have chosen to adopt it:
1. Quicker Calculations
One of the greatest advantages of using an automated payroll system is it handles the tricky calculations. All employers need to do is ensure that all workers’ information is accurate. After that, the system remembers their information and calculates what their paycheck will be automatically.
Not only does this system save a significant amount of time, automated payroll completely eliminates the onerous task of looking through spreadsheets, calculating payments and writing out checks.
2. Easier Tax Deductions
Another unique benefit of an automated payroll system is that the software is already encoded with the state and federal tax rates. Every employee’s paycheck already has every necessary tax withheld even if the company operates in multiple states.
The system also keeps track of every single update to the tax policies so that payroll is always calculated by the correct deadlines and with the correct tax rates.
3. Organized Recordkeeping
One of the worst parts of calculating payroll manually is the recordkeeping. The U.S. Department of Labor requires that payroll records must be kept a minimum of three years. The IRS requires that employee tax records must be kept a minimum of four years. This leads to nothing but filing cabinets filled to the brim with paperwork.
However, an automated payroll system stores this information automatically and indefinitely. Employee tax and payroll records can be pulled up with the press of a button.
4. Save Money
Last but not least, an automated payroll system saves businesses money. This may sound counterintuitive because the service must be paid for; however, it costs less for many companies in the long run due to the elimination of expensive errors.
In fact, the American Payroll Association estimates that an automated payroll system can reduce a business’ payroll costs by 80%. When businesses take into account the amount of time and energy required to run payroll manually, they can better appreciate just how meaningful an investment automated payroll is.
Verdict: Automated Payroll Prevails
An automated payroll system offers countless benefits, including:
- automatic payroll calculations
- updated information according to laws and regulations
- indefinitely stored records
- a cost-effective way to complete payroll
People make mistakes, but businesses don’t have to. Through an automated payroll system, payroll is more accurate, efficient and cost-effective.