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Best Ways to Manage Payrolls Easily and Accurately

Payroll Management

Ways to Manage Payrolls

An accountant who is in charge of setting up the payroll system, or who wants to increase the efficiency of an existing system, or who requires solutions to the inevitable variety of compensation, tax, deduction, and record keeping concerns related to payrolls will deriveutmost interest from this post.

It is true that poor payroll management may be a stumbling block for a business, irritating employees and triggering legal concerns.

However, in this post, you will learn the best ways to manage payrolls easily and accurately, beginning with the creation of a payroll procedure.

Establish a Payroll Procedure

A process is a written declaration that lists the reasons for an activity, who is responsible for it, and how the activity is to be accomplished. It is particularly relevant to the payroll system, which is full of actions that must be performed in the same manner every time.

Creating a set of payroll procedures begins with creating a flowchart of the overall process, which allows you to identify all actions and ensure that a procedure is prepared for each one.

It allows workers to carefully provide all of the information required to run the payroll. After you have written a process, it should be followed up with the latter.

Ways to Manage Payrolls: Payroll Management

Payroll Forms can be Automated

If a corporation has a large number of employees or multiple locations (which need to mail forms to recipients), the task of handing out forms might consume a significant amount of staff time. You can avoid providing forms to employees by implementing an automated fax-back system.

Employees must contact a computer, either via phone or through the computer system, and request that the proper form be delivered to a fax number that the employee has access to.

If the employee has access to a computer, he or she can also download the form and fill it out on his or her computer, or print it, fill it out, and mail it back.

Because all of the forms have been scanned and archived, it is possible to make the transmission with no human intervention and no error.

Proper Classification of Employees

Clearly, defining an employee either as a full-time or part-time worker translates to an accurate calculation of his benefits and deductions. But, if an employee is wrongly classified, back wages may be owed or salaries may be overpaid.

Keeping Track of Time and Attendance

This generally applies to wage earners and overtime workers. Salaried employees do not require a change in wages paid for each payroll, but nonexempt employees do require an employer to gather and analyze information regarding hours worked.

Employees may be required to scan a badge through an electronic time clock, punch a card in a stamp clock, or manually complete a time sheet.

Regardless of the data gathering system utilized, payroll officials must summarize this information and ensure that employees have reported the correct number of hours.

Supervisors often check the information once it has been summarized, while more modern computerized timekeeping systems can do the majority of these functions automatically.

Ways to Manage Payrolls: Payroll Management

Giving Employees Direct Access to the Deduction Data

Giving employees direct access to the deduction data allows them to determine the impact of deduction changes and submit the changes directly into the payroll database.

To do this, an interface to the payroll database that lists all deductions taken from employee paychecks must be built (with the exception of garnishments, which are set by law).

This method fully eliminates the need for payroll personnel to enter deduction changes into the computer. Another advantage is that employees are held accountable for their own data input errors.

Other data entries, such as employee names, addresses, and phone numbers, can also be added to the system. Furthermore, the deduction modeling technique as explained allows employees to know exactly what their net pay will be, preventing any surprises. 

Integrate the Payroll and Human Resources Databases

Many data items are shared between the payroll database and the human resources database. Unfortunately, these two databases are typically managed by separate departments: accounting for the first and human resources for the second.

As a result, every employee who modifies one database, such as an address field in the payroll system, must subsequently walk to the human resources department to have the same information re-entered for other purposes, such as benefits administration or a pension plan.

As a result, the employee must go to two departments for modifications; another inefficiency is that the accounting and human resources staff repeat each other’s data entry efforts. Another option is to connect the two databases.

This can be accomplished by acquiring software that automatically merges the two databases into a single one. A less expensive method would be to develop an interface between the two systems that automatically stores changes made to each database and updates the other on a daily basis.

Ways to Manage Payrolls: Payroll Management

Payrolls Should be Reviewed on a Regular Basis

Another guaranteed technique to ensure accurate and simple payroll management is to check payrolls on a regular basis. Modifications in payroll, such as employee classification, salary changes, and changes in relevant rules, for example, can be easily recognized with necessary adjustments.


In summary, to attain accurate and easy payroll management requires some steps that must be deliberately followed. This includes establishing a procedure, automating payroll forms, tracking time and attendance, linking payroll data with human resources, and allowing employees access to deduction data, capped by a regular review of the payroll


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