Smart fiscal decisions are the main key to improving cash flow, but for all businesses, cutting their operating costs is equally important. Payroll expenses are part of operating expenses and often represent a major cost in a business. Many companies are still relying on old methods of creating spreadsheets, legacy software and sticky notes to perform routine payroll tasks and track crucial details. However, these methods are often costly, as inaccuracies may arrive and reduce employee satisfaction.
Easy savings can be made by looking closely at the structure of payroll processing and management in place. The following are some measures that can help you minimize some of the payroll expenses you incur in your business:
Consolidate Processes And Minimize Pay Cycles:
Multiple payroll processing centers and the never ending pay cycles can quickly shred down a company’s efficiency. In addition to these issues, businesses often struggle with legacy systems for getting payments done on time, and other related functions. Consolidating payroll cycles can cut costs dramatically.
For example, migrating from biweekly to bimonthly pay periods, businesses can enjoy 30 to 50 percent overall savings. Also, by reducing the number of payroll runs, a company may be able to free up tied resources and reassign staff to more strategic roles. It requires organizations to adopt a shared-services model, which consolidates activities such as HR, travel and payroll in a centralized department that does all the essential reporting.
Make Pay Deliveries Electronic:
Despite the advantages of direct deposit in employee bank accounts, some companies can pay its entire work force electronically. In several industries such as manufacturing, agriculture and services, employees may not even have bank accounts to deposit their funds into, and often rely on expensive check-cashing services.
ADP.com says these solutions help keep payment processes viable and desirable while keeping things simple for the staff. Electronic pay card option for employees without traditional banking relationships helps the staff to access the money by using electronic cards at any ATM machine. Employees may be paying high fees to pay bills or cash their paychecks every month, so they save expenses with electronic cards, while the company adopting this solution is able to reduce payroll expenses by eliminating check printing and distribution expenses.
Integrate Payroll with Existing Systems:
The most sophisticated software in the world would not be considered efficient if it is failing to link business processes present in the payroll arena. Tax reporting, human resources, retirement account, etc. are processes controlled by individual applications. But automating and connecting these processes can achieve significant saving gains.
The integrated payroll saves the company money as well as simplifies the staff routine information requests. By moving to an electronic payroll platform, businesses can reduce the overall payroll costs, and those savings could translate into several hundred thousand dollars per year.
Sophisticated Systems To Handle Retroactive Pay:
Retroactive pay instances can eat up amounts of your employee’s time if it is not calculated in the payroll system. Having to go back and forth manually to search how many and what types of payments employee had with incorrect rate is a daunting task, and can take hours per staff member if the late change comes at an extended period of time.
So a solution is to integrate a sophisticated payroll system which handles the calculations automatically within minutes, so there is a complete audit trial available for all changes.