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
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
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.
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 withholdings 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.
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.