Importance of Payroll Systems in Business Process Management

The law in most nations of the world requires employers to pay workers for the rendered services. The process of this payment is therefore, made possible through the payment system. Many reasons exist on the necessity of the payroll systems for both employees and employers. This part discusses a few of these reasons.

Saving Time

 Processing of payrolls is in most cases a detailed and time-consuming endeavor. There are organizations that pay on a weekly basis, others bi -weekly while others pay on a monthly basis. Before printing checks, the deductions, benefits and taxes should be calculated. The hourly wages should also be incorporated in the system. The kind of payroll system used, whether external, manual or computerized; ought to be designed in such a way that the amount of time in calculating these aspects is significantly reduced. For instance, an accountant can use the payroll system in computation and calculations of these aspects. This   would significantly save the employer from doing much work and enable him or her to devote the saved time in doing other   works (Natalie, 2013, 2).

Allowing Structure

 The payroll system facilitates the establishment of a payroll environment that is structured. Various documents with regard to payroll such as check information and payroll registers need to be filled for processing of each pay date. A payroll system therefore, enables a filling system that is organized and structured. Computer files eliminate unnecessary filling and paperwork. Further, the payroll system will store the confidential employee information such as address, birth date, social security number and so on and ensuring its security (Minarik, 2008, 225).

Tax Deductions

It is a requirement that all employees and employers to pay taxes to the government or related authorities. These taxes are obtained from employee’s check every payday. On her part, the employer is mandated to deposit her taxes to the government. The payment system ensures that the amount of tax required by the government from both the employee and employer are duly paid. Most organizations would use payroll software or outsource the payroll system in deduction of these taxes in order to reduce the necessity of having to compute these taxes manually and therefore reducing the risk of errors. In essence, a payroll system ensures that   apart from employee’s taxes being paid, the employers annual or quarterly taxes are also duly paid (Minarik, 2008, 335).

Tracking Benefits

            There are employees who would choose to be involved their organization’s health, pension or other benefits. The payroll systems would therefore be of essence in the sense that employees would be able to receive   their benefits in relation to their costs.  The payroll systems will certainly track the benefits and their related costs as the long as the amount to be deducted after each pay period is entered into; they are automatically deducted by the system in every pay cycle. The accountant in this case would only need to revisit the record if there is a change concerning such benefits where he or she is required to change the figures manually (Bullwark, 2013, 3).