A payroll is basically a document showing the distribution of total money that a company is liable to pay to its employees. It shows the records of the salaries and wages that all the employees of the company get. It also includes bonus distribution and tax provisions. Payroll processing involves execution of the calculated salaries and bonuses to the employees. It involves maintaining a balance in the payroll data just as a balance sheet and reconciling or correcting any error causing disbalance. The process is a complex one and hence may require some companies to hire a payroll service provider.
When we talk of payroll processing, we generally don’t consider the option of flexibility. More specifically, we don’t think that the element of flexibility would fit into payroll process. The obvious reasons being the pay dates and tax filing deadlines are not flexible but fixed.
Evolution in payroll process
With the journey of payroll from being a simple obligation to being a stressful task, it became quite important to introduce new and flexible payroll options. It is not necessary that any company will prepare its payroll exactly on the scheduled time. There may be instances where the company has to go ahead of the schedule to pay its employees. Furthermore, the chances of errors in calculations are also unpredictable. Thus, the need of options that would make payroll quicker and stress-free. These options are – Same-day payroll, next-day payroll and cancel payroll.
Same day and Next day payroll
As already mentioned, there may be instances when company needs to ignore the scheduled payroll date and execute payrolls of certain employees. These instances may arise when an employee is in sudden need of money for some reason. Or when an employee decides to resign in the middle of a month. In all such situations, the same day and next day payroll services can turn out to be a blessing. A same day payroll service allows the company to execute the payroll on the same day as scheduled. Next day payroll, on the other side, enables a company to execute it on the next day of the scheduled business day. Such services are required the most by small businesses which do not have adequately qualified employees to give away payrolls on such a short note and without errors.
Errors in payroll can strike back to the company really hard. An error may create hustle among employees and develop pressure in the management. But it doesn’t end here. It has a greater impact causing a greater result of a petty mistake. An error in a payroll implies an error in tax payment. This may result in penalties levied on company by the government authorities.
Hence, cancel payroll is opted. At times, when people make mistake while calculating the wages and bonuses, leading to underpayment or over payment, they have to cancel the whole payroll. This can be time consuming and expensive. But, if someone spots an error in payroll shortly after execution of payroll, one can select cancel payroll option. It will stop the payroll execution process right in the middle of its track and the person can start fresh with the correct amount in the payroll.
Payroll processing is not an easy challenge to take. While preparing payrolls, one has to keep in mind a lot of factors. The person must take into account all the legal obligations such as minimum wages to be paid, tax deductions, paid holidays, paternity or maternity leaves to be paid ( if any), loans for children and any other perquisite that the company is giving to its employees. Thus to cover up errors in processing and to facilitate emergency payroll executions, flexibility in payroll processing is of great significance.