How Automation Can Benefit Payroll

[Fit Small Business | ]( HR Insights from Our Experts [How Automation Can Benefit Payroll] Welcome to this week's HR newsletter. We’re so happy to have you! Payroll can be a complicated and time-consuming process. It can also be error-prone, especially if you’re using spreadsheets to calculate wages, deductions, and taxes. However, it need not be. With payroll automation, you can save time and prevent costly pay processing errors.     What is Payroll Automation?   Payroll automation is the use of automation tools to streamline the way you pay employees. This is done via a payroll system, and the automation can cover any part of the payroll process, from calculating the applicable wages and deductions to generating the required payroll and tax forms. Platforms with automation functionalities have tools that trigger specific software actions based on certain events. Here are a few examples of how payroll automation solutions work: - Timesheet data collection: After a manager approves [timesheets]( at the end of the pay period, an automated HR payroll system can automatically transfer the employees’ actual hours worked from its time tracking solution into its payroll module for pay processing. This removes the need for manual data entries. - Payroll tax calculations: Users can set the [tax rates]( that are applicable to their business and location—this removes the need for manual calculations. Most payroll systems even come with built-in codes for federal, state, and local taxes, including compliance solutions for tracking changes in tax rates and regulations. - Employee information updates: With payroll automation tools, employee pay data are automatically updated and saved. This makes it easy to calculate total earnings, taxes, and deductions for year-end tax reporting. Plus, automation tools can help capture changes in the employees’ salaries and benefits, as well as make the necessary pay adjustments for [payroll processing](. Did You Know? [HR automations have increased]( by 599% over the past two years, according to Workato’s 2022 Work Automation Index. System automations for payroll and benefits processing have also risen by 14% in the last year.         Benefits of Payroll Automation   Aside from minimizing manual data entries and streamlining processes, payroll automation helps to: Reduce human error in calculating earnings, deductions, and taxes Improve [payroll compliance]( and stay up-to-date with the latest tax regulations Easily access and generate reports for checking payroll costs and filing tax forms Reduce HR labor costs as you won’t need a large team to handle payroll Minimize penalties due to payroll and tax filing errors Employers can suffer huge financial losses from payroll errors. A 2022 Ernst & Young HR Processing Risk and Cost survey showed that respondents whose companies were fined by a regulatory board (e.g., the IRS or a state authority) last year for miscalculation errors [paid an average of $5,200 in penalties](. Can all payroll processes be automated? You can automate most payroll tasks, but you still need a payroll administrator to manage the system and input information, such as updated pay rates or special bonus amounts. Also, the HR and payroll processes you can automate depend on the type of software you have. Those that can handle basic to advanced HR can help streamline a wide range of HR tasks, from hiring and new hire onboarding to pay processing and compensation planning.     Tips for Automating Payroll   If you’re planning to get an online solution to replace your manual pay processes or you want to upgrade to a more advanced payroll system, here are some tips for implementing an automated payroll software. - Review current payroll process: Knowing how your company runs payroll can help you spot tasks that can be automated. - Consider current and future payroll requirements: Take a look at your pay processes and identify the features that your company needs now and in the near future. This way, you can get a system with scalable payroll solutions that can grow with your business. - Create a project team: It’s important to create a team that has the necessary skills to manage a payroll automation project. And for easy progress tracking, set up clear objectives and a roadmap with key performance indicators and [smart goals](. - Communicate with stakeholders: Create and implement a communication plan so all stakeholders know about the payroll automation project and implementation timelines. Note that your stakeholders include your entire workforce. You may also need to collaborate with your finance and IT departments, as the new system could impact their processes and software security protocols, respectively. - Plan payroll learning sessions: Don’t forget to schedule learning sessions for your employees and payroll administrator so they know how to use the new system. Having access to a trial version of the software that your workers can explore during training is also helpful. If you think that your HR staff could use some training to enhance their pay processing skills, read our guide on [how to get the best payroll training]( for your business. Managing payroll can be challenging, but having an HR system with robust workflow and automation tools, like Rippling, can streamline the way you pay employees. It comes with integrated solutions for managing hiring, time tracking, payroll, compensation bands, and learning management. Plus, its network of over 500 partner apps makes it easy for tech-heavy companies to connect Rippling’s platform with the business systems they typically use. [Visit Rippling](     What is human resources (HR) software? Human resources (HR) software systems unify [recruitment](, [payroll](, [training](, [employee engagement](, [performance management](, and other essential HR functions. This provides a secure database of employee data and a centralized view of the company. It also helps HR teams manage each stage of the [employee life cycle]( effectively. [Read More](     What’s new in HR? Check out some of our latest HR content:   [Hiring Laws: Rules to Follow While Growing Your Team]( Understanding and adhering to hiring laws is not just a legal necessity but an integral part of running a business and managing employees. This guide walks you through the federal and state laws that directly impact hiring, including other legal requirements for recruiting workers, such as minimum wage rates and new hire reporting. [READ MORE]( [Top Payroll Software for Paying Contractors]( While paying contractors may be simpler than paying employees, it’s important that you partner with a payroll software provider that can compliantly handle a business’ contractor tax reporting requirements. If you’re looking for the best contractor payroll service, check out our guide, which contains our top picks for small businesses. [READ MORE](     Meet Fit Small Business’ HR & Payroll Experts   [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( Throughout her career, Heather has worked to help hundreds of small business owners manage many aspects of their business, from bookkeeping to accounting to HR. Her experience has allowed her to learn firsthand the payroll needs of small business owners. [Heather Landau]( [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( Jen has more than 20 years of writing and content experience, working with small businesses and Fortune 100 companies. She worked as an HR generalist for over a decade, providing accounting, payroll, and HR expertise. [Jennifer Soper]( [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( Robie is a payroll and HR expert at Fit Small Business, focusing on software. She has over eight years of content writing experience, handling different topics. Robie also worked as an HR specialist for 10 years where she managed various facets of HR—from payroll and benefits to employee services and HR systems. [Robie Ann Ferrer]( [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( Juvy has more than 10 years of experience writing product reviews and providing online content for small businesses. Juvy was also a college instructor. She believes that her teaching background, writing experience, and supportive team members are crucial in providing the best answers to readers. [Juvy Vallescas]( [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( Genevieve has more than 13 years of writing experience, working with different clients in various industries. She has ghostwritten several books and ebooks on marketing and leadership. Genevieve also worked as an HR Head of a local manufacturing company and has helped small businesses set up their business and HR processes. [Genevieve Que](     Want to know whether a non-complete agreement violates the National Labor Relations Act? Tune in for next week’s HR newsletter for everything you need to know about this topic. Until next time, Heather Landau, Jennifer Soper, Robie Ann Ferrer, Juvy Vallescas, and Genevieve Que   For more quality resources on growing your small business: [Marketing]( | [Financing]( | [Accounting]( | [HR]( | [Retail]( | [Ecommerce]( | [Sales]( [Facebook]( [Twitter]( [LinkedIn]( [Alternate text] Want to change what you receive in your inbox? [Update Your Preferences]( [Image]   We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. 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