5 Reasons Why Payroll Processing is Important
Although payroll processing might appear like one of the least interesting functions in the organizations, that is certainly not the case! It is for this very reason that not enough attention is paid towards the process. It is not a part of the organization’s core operations so many times payroll is overlooked when it comes to increasing efficiency and optimizing resources.
Typically, HR and payrolls are generally delegated to the background but they are also the most expensive. So whether you think it is exciting or not, you may want to change the way you do your payroll. It could very well be one of the most important business decisions you make in a long time.
Here are 5 reasons to understand why payroll processing is important
Making accurate payments:
Typically, money can be lost because of excess payment or lesser payments.In case of excess payment, employees are being paid more than what their salary has been defined. This means you have already exceeded your allotted budget. Worse still, you may now have to take steps to reclaim that excess money from your employees. That could be embarrassing!
Paying lesser than the determined amount is not good either. You will eventually have to pay the remaining amount or be prepared to face the Government for incorrect salary processing. You’ll also be responsible for missed employer contributions as well. And if this continues to happen on a consistent basis, you will end up spoiling your reputation as well as have to pay hefty fines to the relevant authorities.
Avoid penalties and fines:
Whenever there is incorrect payroll processing companies need to pay huge amounts of fines. If the scenario demands it, it may be your responsibility to pay missed with holdings on behalf of the employee. And there could be no way of reclaiming this money as it was primarily your fault they missed the payment. You are also liable to face strict charges in such situations where your license to work may also be taken away.
Submitting incorrect tax forms is one of the surest ways of squaring off against the Income Tax Department. A situation we recommend you better not face. Even if there are a few inconsistencies you are liable to have a visit from the CRA auditor. The logic here is simple: For your taxes to be accurate you need to have a robust and efficient payroll system.
How much does to cost to run your organization? Can your profits balance these costs?Payroll processing helps the organization understand the amount they spend on their workforce.This budget consists of all the costs associated with the recruitment and training process. Stay updated about how much does it cost to hire or retain any employee and you will be able to take much more informed decisions.
Increase employee morale:
Not paying on time or not processing correct salaries is one of the surest ways of damaging employee morale leading them to either get angry or resentful or both. Such employees won’t perform well. It’s better to make sure everything happens in a timely manner!
Get this – Payroll is very important for your organization where it controls a huge array of things. A company’s reputation can easily be determined by the efficiency of their payroll processes.