Charles Spinelli Talks on Why Effective Payroll Administration Is So Vital and How To Manage It

 

Payroll administration is a process that entails computing employee hours, and disbursing their salaries while preserving taxes in addition to maintaining the financial document for the establishment. A host of activities from dealing with the sensitive employee data to computing taxes and transferring the net payable salaries into the bank account of every employee makes payroll management quite a complex and multifaceted task, says Charles Spinelli. Knowing the right techniques to manage the payroll is the key to complying with the law.

The Significance of Payroll Administration

Employees put their best efforts to earn what they get in the form of salary or wages. It is simple that unless they are legitimately paid, they will not work for any business. So, managing payroll efficiently is vital. The various reasons that a company needs proper payroll management are stated as under

To comply with the law: Filing payroll taxes on time is a legal compliance and is designed on a unique set of rules regardless a company is under federal or state government. Violation of filing taxes timely and accurately tends to attract high penalties. To avoid this, managing payroll efficiently is important.

Employee performance: the motto of hiring skilled employees is to get the best performance from them that make a business thrive. However, failing to pay them timely and appropriately will make them demoralized thereby affecting their performance.  

Employee retention: Consequently, the team members will no longer be interested to continue the job with an employer who is incapable to pay rightfully on time. To avoid them leaving the company effective payroll administration is important.

In fact, payroll management is among the most vital administrative job of a business organization. It needs to be done, correctly and lawfully. Therefore seamless management of payroll should be the priority.

Decide the Way to Manage Payroll

Payroll management can be done in different ways. Whichever way is followed, a business need to ensure that both employees and particular government agencies are paid the right salaries and taxes on time.

Manual Processing

As the name implies, the process involves doing everything from payroll calculations to printing or writing the checks and thereafter depositing them into the bank manually. The accountant needs to retain the records in the office cabinet with due diligence.

There are certain drawbacks of the system such as

·         Amount of information: The accountant needs to ensure having access to all necessary information on each payroll to be processed.

·         Incorrect payments: The biggest problem of processing payroll manually is making errors resulting in paying employees incorrect amounts. Mistakes in salary payments also cause incorrect tax calculations. This not only damages employee trust and makes it challenging to retain them, but erroneous tax payments will obligate the business to pay fines to authorities. 

·         Time-consuming: Processing payroll management manually will naturally consume a considerable time which could be avoided more productively in other business-related activities. 

The only advantageous part of the manual process is that it is cost-effective since it does not require buying a computer, software, etc. However, according to says Charles Spinelli, if considered sensibly, the time that can be saved with system-based payroll management is more valuable.

System-based Payroll Management

Using payroll software has become the most popular trend due it its many advantages as stated below.

·         Accurate calculation of paycheck and tax amounts: the software-based payroll management is very simple and ascertains 100% accuracy of paycheck calculation. The paychecks can be remitted through online banking transfers. As wages are paid on an hourly basis, software application makes the process easier and time-saving.

·         Pay taxes timely: Payroll software is designed in such a way that it can compute and deduct it from the salary of employees automatically. The government taxes are kept in separate accounts in the bank enabling to pay taxes on time.

·         Save valuable time: Time is priceless in modern business. Saving time means saving money and most importantly, the time saved can be used in various other activities related to account or other areas.

Apart from the above two, outsourcing payroll management has also become popular these days. In this method, the whole payroll management is handled by a third-party payroll management service provider.