Anybody who has worked in payroll knows that it is one of the most headache-inducing aspects of running a business. That’s mainly because of all the requirements set forth by South Florida laws and regulations, and the fact that in payroll, accuracy and promptness are indispensable.
There is no room for mistakes when employees’ salaries and taxes are on the line. With a proven enterprise resource planning (ERP) solution, you can run your payroll seamlessly.
Inaccurate employee information
In addition to full-time office employees, many small- and medium-sized businesses (SMBs) have freelance or part-time staff and hourly contractors, making their payroll system even more complicated.
Each type or work is governed by a specific employee regulation. For example, deductions and bonuses are different for a full-time office staff and a temporary employee who only renders four hours of work every day. If your database isn’t organized, the confusion will inevitably lead to mistakes.
Errors are likely to occur in such cases, but this won’t be a problem with an ERP as it simplifies your payroll data. You’ll have no problem maintaining accuracy in your database, which means an outdated employee identification number or a misspelled name can be updated across all your documents using a centralized platform.
Do you ever wonder why despite all the new technologies, so many companies still miscalculate salaries? That’s because without a modern ERP solution, calculating salaries still requires human intervention, and that’s when errors arise.
Related article: How CFOs can face the challenges of modern finance
A good example is a part-timer complaining about a miscalculated salary because he was misclassified as a permanent hire. Another one that happens all too frequently is someone miscalculates overtime pay. It isn’t easy to track overtime hours, so there is always a chance that they will be tabulated inaccurately.
Noncompliance with statutory requirements
Payroll compliance legislation makes sure employees are treated and compensated fairly. As a business owner, you must comply with these requirements not only to avoid penalties, but more importantly, to show your employees that you value them.
The government may adjust these regulations and tax rates so be sure to stay informed. Or, partner with a reliable ERP vendor to do the job on your behalf. As long as your ERP conforms to the IRA’s regulations, you can rest assured that all payments and deductions will be computed precisely and pay slips will be generated automatically.
Confusion over taxes
Your payroll team probably deals with more stress than any other team in your company, and tax structures are usually the culprit. Sure, SMBs operate on a smaller scale, but each employee's responsibility and compensation packages are different, which makes the process more complicated.
Apart from issues concerning pre-tax and post-tax calculations, there are also problems such as missing business records or failures to differentiate deductible from nondeductible expenses. Again, this isn’t a problem with an ERP system where everything is organized and computed automatically.
With all the records and information payroll employees deal with, it is not easy to keep tasks on schedule. Ideally, pay slips are distributed at specific periods every month. You miss it once, and staff morale takes a nosedive.
Failure to file taxes to the IRS on time is another story. As more tasks pile up, there’s a good chance you’ll neglect certain requirements or find it hard to trace back historical documents. But thanks to a fully integrated ERP solution, you have complete visibility over the payroll system so you never miss a single deadline.
Let the team at WhiteOwl help you implement a Business Central to simplify your payroll processes. Contact us today for more information on how we can help your business.