Payroll Software Providers: What are the Pre and Post Payroll Processes you need to carry out?

Payroll is an important factor in any company. A small mistake in payroll leads to serious damage.

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Really? Yes, payroll has affected many businesses financially, and recovering from it has become tedious. This justifies the importance of payroll. From providing salary to managing the compliance, payroll software providers offer an organized solution within one software.

Here are the steps you need to carry out before and after payroll processing.

  • What is Payroll?

Payroll is a system used to manage the salary of employees and other compensation. It involves

  1. Framing the organizational payroll policy.

  2. Basic pay, Variable pay, House Rent Allowance (HRA), Leave Travel Allowance (LTA).

  3. Calculation of gross salary and deductions.

  4. Providing employee salary.

  5. Provident Fund (PF), and Tax Deducted at Source (TDS).

Maintaining records on all this information is necessary to process seamlessly. A payroll software provider helps you in consolidating all this information in one place. There are three stages in payroll processing.

  1. Pre-payroll

  2. Payroll processing

  3. Post-payroll

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  • What are pre-payroll processes?

  1. Framing a payroll policy

Defining the payroll policy is the first and foremost step in pre-payroll activities. Some of the organizational payroll policy covers

  1. Attendance policy

  2. Pay policy

  3. Leave and Benefits policy

Framing these policies and getting approval from the management ensures the standardization of payroll.

  1. Getting the payroll details

For effective payroll processing, you need to collect data from all the departments.

For example, you need to gather basic employees' data from the Human Resources (HR) department. In small companies with only a few teams, you can inquire about them and get consolidated data. When you consult a payroll software provider, they have a software solution for recording all this data. Ask them if the payroll software you're choosing has separate tabs for employee service portal, leave, and attendance management to preserve the data.

  1. Cross verification

Once you gather all information and frame organizational payroll policy, now it’s time for validating the data.Check the format, authorization matrix, and company policy. Plus, ensure no employees' data is missed out. After pre-payroll, you need to calculate the net pay for all employees, including the taxes and deduction.

  • What are post-payroll processes?

  1. Compliance management

As per statutory compliance, you need to pay employees that abide by the state and central legislation. It includes

  1. Employee Provident Fund (EPF).

  2. Tax Deducted at Source (TDS).

  3. Employees’ State Insurance (ESI).

After deductions, pass the information to government agencies. These payment dues vary with the type of dues. Once you have paid all the dues, file the reports for future reference.

  1. Accounting & Payout

As a part of payroll management, every company has to maintain a record of the financial transactions. You can feed the reimbursement data directly into the Payroll or Enterprise Resource Planning (ERP) system. Next, when paying the salary to employees, keep a fixed system-cash or cheque or bank transfer. Many companies provide their employees' salaries via bank transfer for easy transactions. While doing this, ensure your company's account has enough funds. After which send the salary bank advice statement to the respective branch, it must include employee id, account details, and the wages. When you use payroll software with an employee self-service portal, you can publish the payslips so that employees can access them through login details.

  1. Payroll reporting

After completing the payroll for the month, consolidate the payroll details as a report. These details will be useful for your company’s finance team. The report must contain the employee details department wise. As a payroll officer, it is your duty to get data, frame a report, and send it to the finance team.

The Bottomline

When you follow this step-by-step process, there won’t be any problem in payroll ever.

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