PREPARED BY
SONIA MAHINDRU
ASSISTANT PROFESSOR IN COMPUTER SCIENCE
HANSRAJ MAHILA MAHA VIDYALAYA JALANDHAR
PAYROLL SYSTEM
INTRODUCTION
A manual payroll system is performed entirely by hand, whereas a computerized payroll system allows a company to process its payroll via dedicated payroll software. A manual system can result in payroll errors and is usually a slow, laborious process. Computerized systems offer a number of advantages, including increased accuracy and speed.
A computerized payroll system performs the same functions that manual methods of payroll do. It stores employee data, such as names, addresses, social security numbers, pay rates and withholding allowances of each person. It calculates payroll taxes and deductions and keeps all data up-to-date after each pay period. Many payroll systems perform accounting functions, such as preparing general ledger entries and documents used for tax purposes, such as W-2 statements and quarterly financial statements.
FEATURES
While each computerized payroll software is setup differently, most have a standard user interface with menu items, windows and buttons designed to make the process efficient for whomever uses it. For example, the software may have standard "File" and "Edit" drop-down menus that contain functions like "print" and "save." It may also have menu buttons you can click to access different sections of the payroll system. For example, one section may be devoted to employee accounts, one for payroll data and another for reports or graphs. Within each section, you'll often find tabs, folders and spreadsheet-like grid cells so you can navigate the system and view data in an organized fashion.
ADVANTAGES
Simple Timekeeping
Keeping track of the hours your crew works doesn’t have to be hard. Using manual punch cards and time clocks seems easy, but these processes add extra steps. After all, punch cards don’t transform into paychecks. At the end of every pay period, you have to collect timecards and input the data by hand.
With an electronic system, you can streamline the process. Instead of using paper cards, have your crew sign in digitally. Whether you have them sign in on a computer or swipe a badge, you can track time electronically.
When the pay period ends, the system sends the data to payroll automatically. You won’t have to worry about losing information, making the whole process simpler.
ADVANTAGES
Easy Calculations
Processing timecards and writing paychecks by hand isn’t as easy as it looks. Sorting all the data takes time, and errors can result when you have a manual process. After all, your team is human, and mistakes can happen.
With an electronic payroll system, you can forget about time and human error. Payroll software takes your timekeeping data and calculates your crew’s time and paychecks automatically. Whether you pay by the minute or by the quarter-hour, a digital system takes care of turning time into money. This will also make it easier to write accurate construction bids on projects.
ADVANTAGES
Automatic Processing
With most manual payroll processes, you have to print checks or write them by hand. If you’re used to doing either, taking that additional step might not seem like much work. With a computerized system, however, you can eliminate that extra work.
When you go digital, your system does the processing automatically. You can set your crew up for direct deposit, and their paychecks will appear in their accounts every pay period. You can still print paper checks with a digital system, but you can look forward to an automated process.
ADVANTAGES
Accurate Deductions
If you have employees, you have to deduct amounts for a variety of purposes. From taxes and retirement contributions to health care benefits and uniform fees, you might have a long list to track.
When you go digital, the application you choose can calculate deductions for you. That means you won’t have to stress about accuracy or errors. Instead, the software takes the input and applies deductions automatically.
When tax season arrives, you won’t have to think twice about providing paperwork. Your payroll software can easily calculate total deductions and create tax documents for your crew.
ADVANTAGES
Reporting Options
When you do payroll by hand, you also have to create reports manually. That means generating reports for pay periods or tax season can take hours or even days.
Digital applications make reporting much easier. Most programs produce a report every pay period so that you can check the information before generating payments. During tax season, you can generate almost any kind of report you need, too.
Over the course of a year, a digital system could help you save countless hours. That means more time to focus on your business and fewer opportunities for error.
ADVANTAGES
Expanded Storage
Take a look at your company’s filing cabinets. The amount of paperwork may seem small, but it adds up quickly. You have to keep records of your crew’s time and payments for at least three years. So how can you make better use of storage space?
With a digital system, you won’t have a need for paperwork. Instead, you can keep payroll records on your computer or online. That means you won’t have to deal with endless stacks of paper or cabinets full of documents.
An electronic system also offers more storage space. Your office may only have space for a few thousand documents. However, you can save millions of records on most computers. That means you’ll never have to worry about running out of storage space again.
Learning Curve
While many of these systems strive to be user-friendly, there’s still a learning curve. The more advanced a system’s features, the more there is to learn and the longer it will take to use the system efficiently.
Room For Error
While the system eliminates much of the grunt work, there is still room for human error. Especially at the outset, you’ll need to enter data manually to get the system up and running. When onboarding new employees, there’s room for error when entering their information into the system. The system eliminates many of the chances for payroll errors, but it isn’t foolproof.
DISADVANTAGES
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