Manual payroll requires a significant time commitment for every pay period. Poring over spreadsheets, calculating various types of payments, then writing out cheques by hand is nobody’s cup of tea. To make matters worse, what happens if someone needs an extended leave from the office, or if there was a mistake in calculations or recordings?

Once a business reaches a point where processing payroll manually becomes too expensive and time consuming – that’s when you know it’s time to make the switch. Payroll automation is a cost- effective solution to speeding up and perfecting your businesses payroll process.

What is Payroll Automation?

Payroll automation refers to the use of technology to quickly perform and manage all types of payroll tasks; basically instead of manually executing the work , the system will automatically complete tasks for you. The types of tasks it can perform include calculating basic salary and hourly wages, to more complex functions like overtime, double-time, commissions, bonuses, raises, retroactive pay, wage deductions, tax calculations and tuition reimbursements.

Usually, an automated payroll is integrated into the company’s enterprise resource planning system that provides an overall view of the company’s finances.

How to Automate Payroll

Before you begin automating your payroll, ensure that all your data is correct and up to date. Start by making a list of the tasks you need to do to keep your payroll accurate. Your list can help you keep all of your payroll ducks in a row and prevent you from missing an important step in your process.

• Enter timesheets into a cloud-based time tracking software. Doing this will help automate your payroll process because the calculations will not need to be made by hand. The additional benefit is that anyone with access to the software can use it to track and submit working hours.
• Export data into cloud-based payroll software. When you export data into a cloud based software, such as QuickBooks Online, functions such as the generation of employee T4s, ROE’s, and payroll taxes are automatically completed.
• Create journal entries in a cloud-based accounting program. Once the payroll for a specific pay period is complete, you can use your payroll software to create and export journal entries directly to a cloud-based accounting program. Automating this important data entry step in the payroll process not only saves time, but it also ensures the accuracy of your accounting records.

Payroll Tasks That Can Be Automated

The purpose of automation is to streamline the payroll process. There are a multitude of tasks that can be completed by a cloud based payroll system, including:

• Record banking information
• Create pay schedules
• Benefit deductions
• Calculate hours
• Adjust hours for PTO and holiday
• Adjust pay for overtime
• Submit payroll
• Provide employees with pay stubs and checks
• Run any mid-cycle payroll corrections
• Open enrollment benefit changes
• Worker’s compensation
• Federal, provincial, and local tax filing
• Employee tax form filing and distribution

8 Benefits of Automating Payroll

Automating your payroll will be advantageous for your small business in many different ways. See this list for 8 ways payroll automation can help you:

1. Faster payroll calculation

Manual payroll calculation takes an immense amount of time. A company needs people looking over various excel spreadsheets, comparing information from different sources, and calculating everything “by hand.”

With an automated payroll system, all a human resource employee needs to do is to enter all of the information once, and the system will take it from there. The final result will be the correctly calculated payroll for each employee.

2. Less chance for human error

The good thing about a cloud based payroll system is that it doesn’t have bad days that will affect its work. Automation reduces the chances that an employee’s wage calculation or a portion of the employee’s data will be lost or improperly entered. When data is incorrectly imputed it can take up time to correct as well as cause issues for the employee and company – such as reimbursement and or legal challenges. Payroll automation will help protect you from these types of situations.

3. Save money

Businesses that have an automated payroll system don’t need to have many HR and financial staff. By cutting down on the amount of staff you need to hire, your businesse's operating costs will be reduced and therefore improve your bottom line.

Outsourcing your payroll can be quite pricey, but you can cut down on costs by implementing a payroll automation system.

4. Time tracking becomes less stressful

Manually tracking work hours for employees is time unnecessarily time-consuming as well as stressful. This is because HR personnel need to pay attention to the time clock and hourly wages of every employee at the company – on top of all their other daily tasks. Therefore, companies that implement an automated payroll system will greatly reduce stress levels for the HR departments, and create more efficient workers.

Automated payroll will also benefit employees as they will receive a simpler way of timekeeping that will make tracking their working hours much easier. Additionally, they will receive a pay stub that perfectly corresponds to their working hours and hourly wages, each pay period.

5. More security

Relying on an automated payroll system provides the reassurance that you are complying with payroll regulations. Automated payroll software normally comes with the proper guidelines of procedure coded in the system. This means you avoid the risk of falling outside the code of conduct on – for example – payroll taxes.

A payroll remittance is an amount you have to send to the Canada Revenue Agency (CRA) after paying remunerations (Remunerations refer to the various forms of compensation and benefits that you are required by law to offer to your employees. They include salaries, wages, commissions, taxable benefits and pension income) or giving a taxable benefit to an employee on your payroll. When you have an automated payroll system, you completely omit the risk of missing these payments because they can be done automatically.

When you automate your payroll, you can feel safe knowing that all sensitive information is encrypted, backed up and protected by password. This way only the people who you assign access to will be able to view it.

6. Easier payroll tax calculations

Unless you’re an accountant, doing taxes is probably not your forte. Unfortunately taxes are a part of every business and there is no exception for payroll services. Examples of tasks include determining payroll taxes and withholding tax amounts for employees income.

A great advantage of having an automated payroll system is that the payroll software already has tax rates and rules embedded in their code. Therefore, wage deductions such as employment tax and employee benefits are automatically calculated.

7. Quicker processing

Automating payroll establishes a self-service method for employees who are collecting their paycheque. They will be able to enter their own information into the HR software, and once the data has been checked and approved by the company, the employee will receive their paycheque automatically, each pay period.

This greatly reduces the time required for each pay stub to be processed and paid into the employee’s account, no matter which types of payment the employee uses.

8. Easier to keep track of records

Automated payroll systems make tax filing and keeping tax records much easier since all the information is in one place, and there are no hard copies that could be misplaced or damaged.

Automation also makes it much easier to create other kinds of reports as well as gather statistical data for research and improvement purposes.

What to consider when choosing an automated payroll system

Choosing the right automated payroll system for your business is crucial. Some key factors to consider include the system's ease of use, cost, customer support availability, integration capabilities with other business software, and how well it can adapt to your business's growth.

You'll want to make sure the system can handle your specific payroll requirements such as different pay rates, bonuses, and benefits.

Embracing payroll automation

Embracing payroll automation isn't just about efficiency—it's a step toward better overall business management. It allows for improved cash flow management, enhanced data security, and more accurate financial forecasting.

Payroll automation also provides more effective human capital management by freeing up time to focus on your greatest assets—your employees.

Payroll doesn't have to be a stressful process. With QuickBooks Online you can turn it into an efficient, error-free system that offers peace of mind. For example, the employee portal allows employees to track their vacation days, view pay stubs, and access T4/RL1 slips. We also assist you by automatically preparing your year end forms, staying on top of tax rates and more. Try QuickBooks Online today.

Disclaimer

Money movement services are provided by Intuit Canada Payments Inc.

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