An Introduction to Human Resource & Payroll Planning
Having recognized the true significance of Human resources, the era of industrialization came with tremendous changes to workplaces. Ever since then, Human Resource has emerged as a separate department in organizations with due consideration for factors such as employee engagement, appraisals, recruitment, payroll, training, etc.
While training employees has been one of the major improvements in the Human Resource factors, companies want their employees to specialize in their work, whereas, the employees are committed to following the progress roadmap for one most important factor i.e., payroll.
What is Payroll Planning?
Payroll planning is not as simple as it sounds, rather, it is a thorough process especially in organizations where the number of employees down the hierarchy is in two digits or greater. In essence, the simplest definition of payroll is the process by which employees get their salaries. Undoubtedly, organizations want to make sure that the employees are paid on time, appraisals added, deductions made, leaves counted, allowances allocated, and whatever the policy a company follows.
Payroll planning and disbursement are not easy to process to accomplish. This is because, to make sure that the payrolls are created on time with correct allocations, and further that the salaries are deposited on time, with confidentiality. This means that payrolling itself is a complicated and rather critical process as it involves organizational resources and employee satisfaction. Irrespective of the culture, payrolls in organizations around the world are the most imperative.
Case studies and researches also show that poor payroll planning can make employees relocate if they can get better options. It is more important to understand the reasons why payrolls play a significant role in organizations. Such as the following factors are directly associated with the payrolling policy of companies around the globe:
Motivation:
Remuneration increases the morale of employees and motivates them to work harder. Consistent paycheques do make employees more responsible and consistent. Especially, they are aware of the checks and balances and the commitment of the organization with what to do in the workplace.
Organization’s goodwill:
As a matter of fact, we all know that timely and accurate payrolling maintains an organization’s goodwill in the market. Not paying on time, and not giving a good compensation ruins the credibility of the organization. This is where a proper system is needed which can carry out the payroll planning process.
When planning payrolls there are some standard sets of procedures organizations have to usually undergo.
No doubt, payrolling is a complicated process but each step is important as they are interconnected with each other.
Onboard:
The first step is to take employees onboard. Where the term onboard refers to agreeing on the benefits the company agrees to offer in return for the services offered by the employee. This step is most important as it is the foundation of the payrolling process and decides the accumulative expenses a company would be required to pay in terms of employee salaries.
Payroll policy:
It is a must to define a comprehensive payroll policy, which should have complete clarity to avoid any conflicts, whilst a payroll policy may include but could not be limited to periodic compensation, leaves, annuals, deduction, allowances, appraisal, bonuses, and all the factors pertinent to payroll planning
Employee data:
Once the payroll policy is approved, it is time to gather the employees’ data which means the employees’ bank account details, basic salary, agreements, home address, and other relevant data.
Validation:
Once the employees’ data is ready having all the related information gathered, it’s time to validate the data for any possible errors or missing factors in order to avoid errors and future problems.
Payroll:
As soon as the information is authenticated, the payroll is calculated taking into account all the prevalent factors to payrolling. Companies need to be critical of performing this step with deliberate attention to detail since it is the most complicated aspect of the whole process. Deduction of taxes, gratuity, pension, and factors like car financing should be taken into account while performing this step.
Disbursement:
Having carefully managed through all these steps and approvals, the payrolls should be disbursed in due time. Finally, disbursement is managed via bank accounts such as transferring the funds from the company account to employee accounts.
Payslips:
When all of the above steps are concluded, companies generate payslips for all of the employees to have them acknowledge the receipt of their due compensations. Other than that, the payslips contain all the information about any kinds of deductions or additions of amounts to their salaries so that the employees are cognizant of all the factors.
While generating payrolls a lot of issues can come along during the process. Certainly, these problems arise due to the several factors involved in payrolling, also, because of the increasing number of employees in an organization. Perhaps, human errors are unavoidable and the probability of these errors increases when handling bigger data. Besides, some of the basic issues which arise when creating payrolls are:
Spreadsheets:
Spreadsheets are the most common medium for generating payrolls, since, working on spreadsheets is technical not every person completely understands or be able to do it right. On the other hand, using spreadsheets and maintaining all the records is a time-consuming and complicated process and is not automated.
Security:
The data of many organizations get hacked or misused at the hands of the wrong people. Therefore, keeping the employees’ data safe and confidential is a harder task for organizations to accomplish. Even record-keeping by means of printing is not completely safe.
Laws:
The term payrolling might have seemed easy in the beginning but payrolling is never simple. There are many factors to take into account and hurdles that can bring problems for an organization such as changing laws that can make the whole payrolling system change so that the organizations have to amend the whole process.
Employees:
Employees are always looking for increments and incentives which is why they try to perform better.
And companies do implement such incentives and increments to motivate their employees. But in this case, a company has to make constant changes in their payrolling system before they can transfer the paychecks. As a result, the process can be hectic and time-consuming.
But not just that, companies employ different ways of managing their payrolls some of which are:
Outsourcing:
There are organizations that hire professional and reputable third-party companies to get their payrolling systems designed.
With the commitment to keep all the data confidential and secure these third-party organizations give promising results.
Spreadsheets:
Many organizations these days make use of spreadsheets to record their payrolling data. Spreadsheets are effective yet there are repercussions and problems when it comes to completely automating the systems.
However, there are information systems available today which are high-performing, as compared to any other methods used in the organizations.
These information systems are designed to establish these specific tasks within the organizations such as payrolling, accounting, inventory management, etc.
Registers:
Most old-school companies still prefer manually maintaining payroll records on the register as they find it more comfortable. Nonetheless, these records are not professional and cannot be updated easily. These records are easy to use for very small businesses which have 2-5 employees but are time-consuming.
Payrolling is an essential process and should be managed accurately with high efficiency to ensure the best results. In fact, people hire reputable companies to make sure if there is absolute clarity and zero errors.
QBM GUIDELINE:
Interestingly, information systems like QBM make work easier and hassle-free. QBM has multiple applications for organizations including payrolling, accounting, performance dashboards, inventory management, project management, etc. So, a company that is keen to automate their systems, maximize productivity or create/manage their payrolling systems without putting in a lot of effort is recommended to use an information system like QBM.
In a nutshell, payrolling is complicated but information systems like QBM can automate payrolling and many other processes within an organization to make your work smooth and efficient. The program has tools and features which are easier to use and powerful enough to make a great difference.
Contact us if you would like to try QBM for free today.
You may also like to read: What is Inventory Management and How to manage Inventory in Practical Organizations
