5 Payroll Management Challenges and How to Overcome Them
Centralizing and standardizing payroll processing almost always comes with a few challenges, but meeting them is worth the effort. Every company is a little different, but most small business owners face at least a few of these five common challenges in payroll management. Read on to find out about what they are and how to overcome them.
Challenge #1: Managing the Change
Switching to new payment processing procedures can be stressful, especially for managers and payroll personnel. If the company has payroll professionals of its own, these are the employees whose roles and responsibilities will be most affected by changes to how the company operates. Providing them with resources like Quickbooks Training makes it easier to overcome dissent and avoid unwanted disruptions.
Challenge #2: Balancing Flexibility with Standardization
Standardized payroll processes offer a better return on investment (ROI) than calculating employee pay and handling everything by hand. However, a good payment processing platform will still offer plenty of flexibility for things like paying out independent contractors when they need to be hired or accommodating local regulations for a diversified workforce.
Before changing over to a new payroll processing system, consider the business's unique needs. Most small business owners find that off-the-shelf software is sufficient to meet those needs. Larger companies may need to invest in boutique software or external payroll management services to get the custom solutions required to accommodate all their employees.
Challenge #3: Effective Data Reporting
Modern companies need to keep careful track of employee data and payment processing. Compiling and analyzing this information by hand can create some serious headaches, and for growing companies, they'll only get worse. A payroll processing solution that has both data processing and analytics capabilities is the best way to ensure that the company's leaders have access to accurate, real-time information regarding employee pay.
The most important change to make is centralizing and standardizing data collection. Modern software solutions make this task easy for small to mid-sized companies. It can be harder for larger companies and those who work with independent contractors to keep track of data, but payroll management services offer a diverse array of solutions tailored to their needs.
Challenge #4: Keeping Up with Changing Times
Technology is progressing at an incredibly rapid pace. That includes the technology required to manage employee payrolls. Business owners need to keep up with the changing times if they want to maximize the company's profits and minimize HR problems.
It can be hard to decide when to switch to a new system. It can seem like as soon as the company implements a new system, a more advanced one gets released. Using a well-established software program that can be updated to reflect changing industry standards will save a lot of money.
Challenge #5: Data Protection and Compliance
Companies have a responsibility to their employees to protect their sensitive personal and financial data. Whether they opt to use on-premises payment processing software or cloud-based solutions, the onus is on business owners to ensure compliance with data protection laws. When choosing new payroll management software, look for security features like two-factor authentication and encryption to minimize risks.
As companies grow, their needs change. That's especially true when it comes to human resources and payroll processing. Small business owners who want to grow their companies will need to find solutions that will scale with them instead of getting left behind.