Payroll Services
Published November 10th, 2016 by

6 Helpful Tips to a Successful Payroll System

6 Helpful Tips to a Successful Payroll System

Having an effective payroll service is one of the keys of sustaining employees’ level of satisfaction.  The employees want an accurate and timely delivery of their salary. If the staffs were frustrated with the payroll system, the attrition rate of the company will increase. That is not a good start of a partnership. Thus, the right payroll service provider should be hired. To have a long lasting relationship with other businesses, payroll service providers must ensure that they are offering the best practices and features to stay on top of the payroll service industry.

Aside from ensuring that employees are paid correctly, payroll service firms are also in charge of employment taxes which should be filed on time to avoid penalties. Moreover, in conjunction with the payroll are compensation information and other data of the employees that should be protected and stored in a secure document storage. In addition, companies will also look for payroll service agencies that provide 24/7 customer support services that will address their concerns whenever the need arises.

There are a lot of established firms which are already experts in the field of payroll services and a lot of newcomers are trying their luck to enter the payroll service industry. With this, businesses are having a hard time in the selection process. However, it is undeniable that they will look for a payroll service provider which not only offers affordable service packages but are known to be experts in this industry. Furthermore, a good payroll service is crucial in having an effective payroll system.

Here are some tips on how to attain or maintain a successful payroll system.

  1. Preparation brings success

We are all familiar with Benjamin Franklin’s statement that those who fail to prepare are preparing to experience failure. This is applicable in every aspect of life including businesses. Since there are no secrets to achieving success, a payroll service company must be ready enough before offering payroll services. It is a known fact that payroll is an intricate and complex process that has to be planned and studied before it is implemented.

The payroll system involves various procedures that are very vital in every business. Part of the preparation is knowing the payroll processes of different companies. Some have simple procedures while other enterprises have complex pay processes. For instance, some businesses have employees who are paid hourly while other are providing full-time salary. It is also important to know about compensation schemes and benefits. Moreover, a company should also be updated on the latest tax regulations and laws of employment.

In addition to this, training should also be provided to the customer support team to ensure that they are answering questions and concerns of clients correctly. They must be skilled enough to manage the interface and troubleshoot technical errors. Knowledge is everything. Companies who are hiring payroll service providers want to talk to people who are familiar and knows how the system operates. This sector should never be taken for granted.

  1. Transparency Is Necessary

A survey conducted by the Institute for Women’s Policy Research in January 2014 revealed that 51% of women and 47% of men stated that conversation about salary information and wage is prohibited or discouraged by their employers.  It is a well-known fact that some companies still implement payroll secrecy. However, when companies allow transparency, numerous benefits can be attained.

As stated by Matt Straz in, transparency motivates employees, promotes equality, reduces turnover and endorses a culture of trust. Moreover, transparency can lead to greater contentment and eliminates wage negotiations during the hiring process. Certainly, having a crystal clear payroll system is worth considering.

Furthermore, problems and misunderstanding arise when employees do not have access to the organization’s pay policy. With payroll transparency, the employees will be enlightened on how employees are classified, how wages are determined, how the payroll system operates or how promotions and pays are computed. By explaining the payroll process in black and white, employees will no longer be suspicious of impartiality. If the company approves, a written copy of the policy can be distributed to every employee.

  1. Automate Processes

The days were long gone when scientific calculators were considered to be the king of payroll. Today, even Excel Spreadsheets is not recommended in getting the job done right when it comes to calculating. According to an article published by Bloomberg BNA, businesses in the United States lost almost $7 in IRS civil penalties just because of inaccurate reporting. With manual payroll processes, human error still remains.

Some of the payroll errors that causes financial loss to the company are the result of manual processes. Carolyn Jerkins enumerated five of these mistakes which include taking the price of human error too lightly, entering incorrect data, utilizing wrong spreadsheet formula, not including incentive compensation and neglecting security concerns. Not only will these errors result to inefficiencies, it could also lead to penalties and liabilities.

Payroll service providers are using payroll software to avoid mistakes not to mention, save time and effort. With automated processes, employees can be paid accurately including overtime. With integration, tracking the number of their tardiness can also be recorded so it will be easier for the companies to determine who among the employees should be given a warning letter. Also, payroll services are not only about paying people, employers are required by law to keep tax records. With automated record keeping, paper-based transactions will be reduced because the payroll and tax data are stored in the payroll software.

  1. Know the Latest

Labor regulations are constantly changing, almost every year. It is necessary that payroll service providers are familiar and informed of the latest employment laws especially those that are about compensation, deductions, benefits, government contributions, and taxes. Most payroll software automatically updates when tax law changes and when tax forms are needed to be filed already.

Aside from staying up-to-date with the laws, payroll service companies must also be aware of the latest and hottest trends in the payroll system. This is one key to getting ahead of the game. Some of the key trends this 2016 as stated by Sandra Swanepoel of Sage HR & payroll includes new cloud-based applications, employee engagement to mobile apps, online recruitment process, data-driven decision making, empowerment of the integrated HR systems and compliance challenges due to complex tax environment.

Also, learning about the business should be a continuous process. Thus, reading books and reviews of payroll services is a basic ingredient of success. Moreover, providers of the best payroll services are sharing their practices and secrets online. Some payroll experts are giving effective strategies for free and these should not be taken for granted.

  1. Re-evaluate Regularly

As mentioned, the payroll system is not only about paying. It is a series of complex processes that are vital for the financial success of a business. For one, there are set of procedures that can go wrong anytime. Reassessment and reevaluation are vital steps to improve the payroll process. If, for instance, security measures are at risk, rechecking and modifying security software is required. It might need to be updated to a newer version or change is really necessary.

Regular auditing is also part of the evaluation to know the effectiveness of the payroll system. Moreover, by measuring performance and productivity in general, integrity is maintained. Also, an appraisal will reveal if financial objectives and other goals of the company are fully met. In addition, auditing is an effective tool in ensuring accuracy and detection or prevention of errors in the business.

  1. Strict Implementation

When every employee follows the rules, the business operation can run smoothly. Moreover, the vision, mission, and objectives can be attained in a timely manner. On the other hand, if most employees are used to breaking the rules, the workplace can be affected negatively. For this reason, it is necessary for companies to implement rules and regulations strictly.

Through integration, payroll services can now track employees who are not doing their jobs properly. It will be unfair if payroll service providers are making their best in giving employees their salary correctly and timely when most of their time are spent on not work-related activities. There are instances when employees are faking their hours by requesting a workmate to clock-in for them. Other workers are fond of surfing the internet or posting on social media sites instead of doing their responsibilities. Some are even taking long breaks just to chat with other people in the workplace.

With the strict implementation of rules, these negative behaviors of employees will not be tolerated. Those who are always late as reflected in the time tracker will be sanctioned accordingly. Such strategy will not only save the company from paying abusive employees, but it will also promote equality and retain deserving workers.


The success of a payroll system does not only depend on the payroll service company. It is a product of various strategies that should be applied in the business. However, it cannot be denied that automated payroll services had changed the payroll system for the better. In addition, to the best payroll services, a good employee-employer relationship contributes to the achievement of business goals.

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