March 11, 2021

Top 5 Benefits of Payroll Automation


If you manage payroll for a small or medium-sized business, it may seem like HR automation technology is better suited for larger organizations with big budgets and thousands of employees.

Nothing could be further from the truth. For organizations of any size, automating key functions such as payroll, benefits, and time and attendance can not only save time and money, but also improve the overall effectiveness of your workforce management activities.

What Is Payroll Automation?

Payroll automation is the process of delivering employee pay with fewer manual workflows. Instead of manual data entry and calculations, automation technology collects, organizes, and stores employee time and attendance data and deductions for taxes and benefits, and performs the necessary calculations for you.

The ultimate result of automation is a streamlined payroll process and accurate employee pay. You can also integrate your payroll automation system with workforce management technology to achieve fully automated time and attendance management, scheduling, and workforce reporting.

Top 5 Benefits of Payroll Automation

Automation takes everyday processes and makes them more predictable. If you’ve ever wondered what payroll automation can do for your organization, consider these top five benefits:

1. Save time with fewer manual processes.
When employees have to manually track their time using a spreadsheet or paper form, they’re wasting valuable work time. Similarly, when you manually run payroll, you need someone to collect, review, and input data from paper time cards and calculate deductions for taxes and benefits, all of which can detract from other important work.

Manual time collection and payroll may be costing your organization more than you think. According to the American Productivity and Quality Center (APQC), it can take anywhere from 5-10 days for low-performing organizations to resolve a payroll error. However, when you adopt payroll automation, you regain valuable time for both employees and payroll team members. Instead of manual calculations, you rely on your payroll platform to do the legwork while you dedicate time to the issues that matter most,

2. Reduce payroll errors.
Managing payroll requires paying different groups of employees according to their established pay rate and hours worked. Even if your workforce primarily consists of hourly workers, you must take into account all overtime, shift differentials, and leaves to avoid overpayments and underpayments.

According to an article published by the American Payroll Association (APA), “Manually keying anything into a system nowadays is an outdated practice. It is also time-consuming and prone to human error.” Payroll automation reduces the chance of errors by collecting employee data—such as tax withholdings, benefits contributions, and total hours worked—and making the calculations for you. You can also configure your payroll system to notify you when any exceptions require your attention, so you can proactively manage errors before they become an issue.

3. Enhance the accessibility of payroll records.
Onsite and offsite storage for paper files requires a significant portion of your budget. Using paper files can also make it difficult to promptly access the records you need. If employee records are stored in boxes, you don’t have ready access to the data needed for reporting and decision-making.

With payroll automation, you can store all pay information in the cloud and access it at any time. You can also configure your system to grant specific levels of access to different user groups. As a result, you can access all the payroll information you need and also control who can view data or make changes.

4. Keep sensitive payroll data secure.
Payroll data is highly sensitive, so if you use physical copies of payroll documents, there is a risk that they could get lost or end up in the wrong hands.

A payroll automation system not only keeps employee data secure, but also protects your organization from losing data. With encryption, firewalls, and vendor solutions that reinforce secure systems, you can have the assurance that sensitive payroll data is safe from being lost or shared with people who shouldn’t have access.

5. Provide employees with self-service options.
According to a 2020 American Payroll Association survey, 84 percent of employees in the U.S. have instant access to information about their pay and benefits. As a result, many American workers expect self-service access to paystubs and other payroll information. Self-service brings more transparency to the payroll process and reduces reliance on paper as the sole means for employees to view their pay history.

Payroll self-service also opens other avenues to put relevant information into employees’ hands. For example, when your automated payroll system integrates with your time and attendance software, employees can see exactly how their working hours translate to their pay. You can also enhance your payroll automation with time clock tools such as a scanner clock, mobile clock app, browser-based time clock, or fingerprint scanner. When employees clock in using these tools, they can immediately see the hours they’ve worked to eliminate any payday surprises.

Boost the Effectiveness of Your Payroll Operations

Today’s payroll automation tools can transform your payroll function and eliminate the headaches associated with manual processes. Thanks to integrations with workforce management software, you can manage all of your workforce and payroll data with greater efficiency and improve your bottom line. To learn more, contact us for a live demo.