The way SMEs operate today has altered radically since the covid pandemic hit the world. Employers have made flexi-work a regular thing and employees now have the liberty to choose how and where they want to work. In this flexible working culture, payroll is of prime significance.
As businesses have adapted to this new way of working and made changes to their working policies, it is important for them to align their payroll processes to a new and flexible world of work. The whole payroll process can be made proficient if it is automated using intelligent payroll software for SMEs.
Payroll challenges faced by SMEs
Many small and medium enterprises that manage their payroll data in house, find it a laborious and error-prone manual process
The hidden costs related to payroll processes, time spent on collecting and interpreting payroll data, validating results, and answering employee queries
Unclear and low quality payroll data affects the reporting capability and impacts business decision making
How Payroll Data Analytics Help SMEs In Making Better Business Decisions?
Payroll Data Analytics
To be ahead of the competition, companies depend heavily on data in today’s world of work and it is no secret. Accurate and timely data helps businesses on crucial matters such as pricing, cost controls, resources and more. The balance sheets, financials or P&L statement provide a fine picture of the financial health of an organisation, it is essential to review some important reports that can aid SMEs to take even better and informed decisions.
This brings us to a fairly fresh concept known as payroll data analytics. These reports are generated from payroll data and primarily reflect on the spending on manpower.
A few examples of these reports are:
Why are these reports important?
The attendance reports serve as an early warning and control system to discover abscondment by employees. The payroll software detects and alerts the manager in case of a continuous absence of 2-3 days without notice by an employee. Basis that the manager can inform payroll and HR departments to stop salary payments to that particular employee, which will plug any money leaks in terms of processing of salaries and extending benefits to the employees who are ineligible. Also, the payroll data generated by payroll software for SMEs provides a monthly analysis of headcount. How? By comparing the active employee data with the attendance records to remove ghost employees or duplications (if any).
Overtime payments are one of the most variable and uncertain costs to any SME. A company may not have clear cost visibility until the payroll department processes the attendance report to extract the overtime hours of the employees. This is where overtime reports come in handy. This report can be used by an organisation to assess under (or over) utilisation of resources, resource optimisation, evaluating resource imbalances and more. Efficient payroll software for SMEs allow managers to set overtime threshold hours for their work and timely alert them in case the threshold is reached, which inturn helps keep the overtime cost in check and effective resource planning.
We all know and agree that sick leaves are generally unplanned and employees are rightly eligible for such leaves. Payroll data can play an important role by providing sick leave reports to the human resource team to help them keep a check on the wellness of employees who are on regular sick leaves. Also, these reports can aid in keeping a track of employees submitting regular medical claims for themselves.
These reports come in handy when it comes to improving the employee experience and keeping the business running without any hassles. For employees availing more leaves, HRs can arrange counseling sessions, etc and retain employee’s confidence in the company benefits program. Alternately, HR can also connect with employees who have not or under-availed these leaves to avoid any cause of burnout and exhaustion.
Wage Cost Predictions
Old payroll data can be put to efficient use by the finance and treasury teams. For what? To forecast wage costs for their financial planning or funding. What does it include? Actual salary costs, statutory costs, benefits, retirement funding, incentives, bonus, overtime and more basis the past trends.
There can be many more reports organisations can pull together using payroll data analytics, basis the specific organisational needs. As they say, if you have data, torture it enough and it will confess to anything.
In a nutshell, here are six ways payroll data can support business decisions
|1. Keep overtime costs in check|
|2. Aid better resource planning|
|3. Remove ghost employees|
|4. Maintain wage parity|
|5. Check wellness of employees|
|6. Predict wage cost for future planning|
Still in two minds when it comes to investing in a payroll software? Here’s why you shouldn’t be.
Payroll software is important for workflow efficiency. But, when it comes to a specific segment of the market, i.e., small-scale and medium enterprises, it sometimes becomes a topic for debate, whether to have one or simply rely on the traditional manual payroll processing.
Earlier, when implementing technology was a costly affair, SMEs refrained from opting for it. But, with advancement, equipment as indispensable as payroll software has become an affordable asset for both small and medium enterprises.
This is the reason why it is now extremely important to specify that the need for automated payroll software in any organization does not alter with the size of the organization and its urgency to grow.
According to a recent study by Kronos and the American Payroll Association – 29 percent of businesses use a payroll system that is 10 years old or older.
The above statistics also includes outdated platforms, use of spreadsheets and manual processing of payroll. Today, SMEs need a payroll overhaul and switching to a new payroll software should be on their list. Hence, we’d like to illustrate the top payroll trends that you must know to stay ahead in the new world of work.
The payroll software for SMEs available today has been designed keeping the above challenges in mind. So, now if you choose the right futuristic software you can optimize the whole payroll process and save your business from being penalised.
Checkout the payroll software trends that will help you stay ahead in the ever changing world of work.