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What is Payroll Automation?
Payroll automation is the use of software and technology to reduce manual effort in payroll-related tasks. It makes the process of calculating and executing payroll easy and error-free.
With payroll automation, HR and finance teams no longer need to spend weeks just calculating taxes, filing compliance and making payroll payments. Tools like RazorpayX Payroll have made the payroll process almost instant.
Benefits of Automating Payroll
Automated payroll brings significant benefits to any organisation:
Reduced errors
Using automation in the payroll process eliminates the risk of calculation or disbursal errors. Since payroll is a complex, cross-functional process, if handled manually, can result in time-consuming and expensive errors. Imagine if a payroll manager disburses the wrong salary – reversing the error can cost a lot of money and manpower.
Cost savings
The consequence of faster and more accurate payroll is cost savings. Automating your payroll brings direct benefit to your bottom line. Minimising incorrect payments, unnecessary labor costs and eliminating penalties due to non-compliance leads to significant savings for the business.
Simplified calculations
Manual payroll calculations can get complex, tedious and highly error prone. Payroll managers have to calculate tax deductions like PF, PT, ESI, TDS, Income Tax – individually for each employee, also keeping in mind employee-level customisations like salary structure and breakup, flexible benefit preferences, and more. With an automated process,
Faster payroll
Automating time-consuming, tedious tasks like managing employee documentation, tax deduction calculations and data entry become significantly faster and more accurate with automation. With tools like RazorpayX Payroll, the entire payroll process is only three clicks.
Features of a Payroll Automation Software
Businesses should look for the following features in a payroll automation software:
Salary calculation & payments
This is a basic feature any payroll tool should offer – calculating and disbursing payroll. Payroll automation should include features like scheduling payroll payments, calculating tax related deductions and making accurate, timely payments to employees.
Robust tools like RazorpayX Payroll also have features to view salary breakup, reimbursement filing on WhatsApp and more.
Employee self serve portal
An employee self serve portal is a tool that allows employees to manage some payroll related tasks independently without having to rely on the HR or finance teams.
Employee self serve portals allow employees to access documents, upload reimbursement claims, check payslips and raise issues.
A robust ESS is a powerful tool that can save significant time and money, since finance and HR managers no longer have to waste time on answering simple employee questions.
Compliance calculation & payment
RazorpayX Payroll is the only software in India that not only calculates your payroll compliances but also makes compliance payments. Automatically calculated compliances and payment can help payroll managers save time and minimise human errors.
Integrations
No single tool can serve all the requirements of every business; since every business has unique needs, a good payroll automation software should allow for integrations with other HRMS tools. These integrations make the tool an end-to-end solution for payroll automation.
RazorpayX Payroll has 45+ integrations with popular HRMS tools like Zoho People, Springverify and more.
Accounting integration
Payroll accounting is just as complex as the process of payroll itself. A good payroll software automates the accounting process by instantly recording payroll payments and payroll-related transactions in the books of accounts.
Employee data management
Payroll processing requires many employee documents like ID proof, bank account details, salary breakup details and more. A good payroll software should capture and store all these details in a safe yet accessible way.
Types of Payroll Automation Software
Payroll automation software can be largely classified as cloud-based payroll and self-hosted payroll. Cloud-based payroll is software which is created and maintained by a third party, licensed or purchased by businesses. It is cheaper, typically has more features and is more accessible by the business.
Self-hosted payroll is software which is developed and maintained by the business itself. It assures privacy, transparency and a high level of autonomy. However, it can be expensive and difficult to maintain.
Payroll automation can also be categorized by features.
Enterprise Resource Planning for Payroll
ERP software is extensive, expensive software which includes functionalities to manage not just payroll but the entire employee lifecycle, from onboarding to exit.
An ERP is used across departments like procurement, finance, CRM and more. Examples of ERP are SAP ERP, NetSuite and more. These tools are best suited for larger organisations with a substantial employee count and the resources to purchase and integrate an ERP.
HRMS
A Human Resource Management Software is a tool used specifically for payroll and HR management related functions. It offers specialised features and typically more user-friendly interfaces. Some features offered by HRMS are payroll management, talent management and employee onboarding.
HRMS software like RazorpayX Payroll are the best option for most businesses, since they offer robust functionalities at an affordable price.
Single-feature software
The payroll process is multi-dimensional and complex. It involves multiple steps like calculating payroll, managing benefits and taxes, disbursing salaries, managing employee documentation and information. A single-feature payroll software solves for one aspect of the payroll process.
Single feature payroll software can be a cheap solution for small businesses, but cannot sustain the payroll requirements of high-growth or larger businesses.
How to Set Up Payroll Automation for your Business
Choosing a payroll automation partner can be a daunting task. It requires extensive research, investment and time – but with the right tool, these efforts can be completely eliminated.
Choose a tool that is easy and intuitive. Tools like RazorpayX Payroll can be onboarded in less than an hour, and requires minimal set-up. Once you’re set up, disbursing payroll is a matter of three clicks.
Check if your tool integrates with your existing ecosystem. You probably already use an accounting tool like Tally or Zoho Books. Ensure that your payroll automation tool has integrations to your existing software and tools.
Ensure compliance with regulations and laws. Payroll is tightly regulated and monitored – ensure that your payroll tool is up to date with all the rules and regulations; not complying with payroll can be expensive.
Choose a tool that fulfils all your payroll needs. Make a list of the payroll processes you need automated, and make sure that your tool of choice has all those features and more.
