Generating a payroll can be hectic! However, the payroll software management process is simple to understand. There are basically three different stages. They are performed in the same order every month. In other words, you can say that the payroll process is a cycle. It is all about arriving at what is due for the employees, making necessary tax adjustments, and then processing the amount. Let’s understand The Ultimate Cycle Of Payroll Processing Through Payroll Software in detail.
Before processing each payroll slip, you enter and update information that the system will use. This information includes pay frequency, employee information, and leave details. When you process a payroll cycle, you must process pre-payroll first and then move towards the final update. The payments, journal entries, and reports steps can be completed any time after pre-payroll and before the final update. During the payroll cycle process, you can also verify payroll related information and correct it if and when necessary.
Here’s a stepwise categorization of Payroll Processing.
The final amount that is to be paid to any employee depends on various factors. The company’s different policies have to be considered at the time of payout. These policies need to be clearly defined right from the beginning and approved by the management. It will only ensure standard payroll processing and administration. The primary company policies include:
You will need to collect the relevant data from various departments and professionals with whom the employee interacts. In larger companies, the process of gathering data can be overwhelming. However, when it comes to SMEs it becomes easier. If you start using payroll software with integrated features to handle attendance management and self-service to the employees, your task will only get easier. Some salary features that need prior attention:
Once you have the data ready with you, you’ll have to ensure that adherence to all these policies is carried out. Verify investment declaration and reimbursement proofs. The most important thing is to ensure that all the new joining employees are included in the payroll cycle.
Actual payroll calculations are the real deal. You will see that the first thing that hits your mind is how to validate the data that is to be fed into the payroll software. After evaluating all the components including EPF, PT, bonuses, bindings, and applicable taxes, the salary is computed. The final amount is the net pay or net take-home salary. Once the payroll process is over, it is advised to reconcile with exact data verification to prevent errors.
This is the key process in maintaining and verifying the payroll records of every employee. Payroll reconciliation ensures that you can stay clear of piled-up paperwork at the time of submitting periodic tax deposits and tax forms and ultimately prevent legal troubles.
Most of the organizations provide their employees with a salary bank account. However, you can also pay in checks or cash. Once the payroll is complete, you will need to ensure the company bank account has sufficient funds for salary payment. Details such as name, ID, bank account number, and PF details are sent to the concerned branch.
All the deductions that you make must be submitted to the respective agencies. The payment is usually made with challans. The quarterly/yearly or annual returns are to be filed and submitted to respective government bodies. In order to perform analytics on the payroll processing, take decisions, and forecast the business future. After you lock and run payroll software for a month, reports such as department-wise and location-wise employee costs are analyzed to plan for the next month and submitted to the finance and senior management team
As you have understood the details of the payroll software process and how the cycle is carried out every month. Let us help you find more about one of the easiest ways to go through this process of payroll software management. UBS HRMS can help you find out an effective way to handle payroll.
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