Is your business still using an on-site, or manual payroll system?
It might seem reasonable from an immediate cost perspective to stick with the outdated legacy infrastructure that you currently have, but there is a long-term cost to your business that you may not be aware of.
One of the benefits of moving your business to a modern payroll system is that its total lifecycle cost is far lower than an old-fashioned on-site system. Here are four ways your legacy system is costing you more money than you realise.
- IT support
The long-term cost of an on-premise system can be significant. For one thing, you have to factor in the cost of regular maintenance which will require a dedicated IT team to do manual updates and respond to any unexpected issues quickly. Other ongoing ad hoc tech support costs include performance tuning, customisations maintenance, integrations maintenance and managing security.
A cloud-based system involves none of these costs. The monthly software subscription fee will be your main expense and it will cover all the support you need.
- Employee productivity
With legacy payroll systems, data such as employee leave requests, employee claims and overtime submissions is typically entered or uploaded manually.
A manual system that uses say, Excel spreadsheets, is even more laborious. Tax tables need to be maintained manually and any change in formula could throw out complex calculations and result in incorrect payments.
This repetitive administration is a tedious and inefficient use of resources. It takes up a lot of valuable time that your employees could better spend delivering productive, billable work.
- Human error
Manual management of your payroll system is prone to human error. Expat employees, for example, have complicated salary structures that require gross up calculations to ensure that they don’t earn less while working abroad. If these aren’t done correctly, then HR management will have dissatisfied employees and payroll problems to deal with.
Another common example of human error is when leave is worked out incorrectly and employees receive less or more time off than they’re entitled to.
If you’re managing your payroll manually then you have to find time to make important legislative updates. If this falls between the cracks, then you could face severe fines or penalties for non-compliance. Staying up-to-date on all the rules and regulations in each and every country that your business operates in, is time-consuming but critical. This task often falls to the bottom of the pile but if left too late, has costly consequences.
The good news is that these issues and unnecessary costs can be avoided by migrating your business to a modern payroll software system. Cloud-based payroll has many benefits for your business, including automatic updates and built-in analytics so don’t put it off any longer!
If you’re ready to migrate to a modern payroll system, or would like to know more, give our team a call today.