What are the Benefits of Automating a Payroll Software System?
How Excel took place in payroll processing?
In payroll processing, HR department needs to take care of many tasks such as payroll calculation, reporting and submitting the payslip. Earlier payroll was processed manually. But manual calculation was not feasible as there are high chances of human error.
Excel’s Assumption vs Reality
Businesses had assumptions that Excel is simple to use, everybody knows to use Excel, easily suits the company requirement, etc. They felt that Excel was the most preferred way for payroll software processing.
Some of the issues experienced while payroll processing through Excel:
- All data is required to be entered manually
- As data is entered manually, there are more chances of errors to be generated
- More than one person cannot work simultaneously on the same excel sheet on which all records are maintained for calculation
- If laws related to statutory compliance changes then update is required in excel sheet
- All the statutory compliance related computation are maintained in different excel sheets so data compilation is difficult and can’t be done in a single day
- As different excel sheets are maintained for various calculation, report generation is cumbersome
- One error while applying the formula and the whole report goes wrong
- Payslips are to be generated and distributed manually
- If virus attacks or system crashes then there is a huge loss of data
CNBC published a report stating Spreadsheet errors are costing businesses billions of pounds.
JP Morgan, a U.S. based multinational banking and financial services company, lost more than 6 billion dollars due to an error made while copying and pasting data from one spreadsheet to another in Excel.
Excel error left Barclays with unwanted Lehman Brothers‘ US assets that included the error of 179 contracts.
Fidelity Magellan Fund, one of the most well-known US-based mutual fund industry, lost billions of dollars when the accountant omitted the minus sign on a net capital loss of $1.3 billion in excel sheet.
To overcome all the above issues or to have an alternate way of payroll processing with a single click, a payroll software is the best solution.