Importance of Payroll Systems in Business Process Management
The importance of the payroll system in business process development is undeniable. The law in most nations of the world requires employers to pay workers for 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. The following section investigates the importance of payroll system;
Saving Time and importance of payroll system:
Processing of payrolls is in most cases a detailed and time-consuming endeavor. The importance of the payroll system arises owing to the fact it saves our time. 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 into the system. The kind of payroll system used, whether external, manual or computerized. All kinds 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 it enables him or her to devote the saved time in doing other works (Natalie, 2013, 2).
Do not you have enough time to complete your assignment? Place your order now.
The payroll system facilitates the establishment of a payroll environment that is structured. Various documents with regard to payrolls. Such as check information and payroll registers need to be filled for processing of each pay date.
It fosters the importance of payroll system. 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. INFORMATION includes address, birth date, social security number, and so on and ensuring its security (Minarik, 2008, 225).
Tax Deductions and importance of payroll system:
It is a requirement that all employees and employers to pay taxes to the government or related authorities. These taxes are obtained from the employee’s checks 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 the deduction of these taxes. It does so 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 employer’s annual or quarterly taxes are also duly paid (Minarik, 2008, 335).
There are employees who would choose to be involved in their organization’s health, pension, or other benefits. The payroll systems would, therefore, is the essence in the sense. 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 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. And if there is a change concerning such benefits where he or she is required to change the figures manually (Bullwark, 2013, 3).