Payroll automation refers to the use of computers to produce paychecks and manage benefit payments for a company or community. Often,

payroll A payroll is the list of employees of some company that is entitled to receive payments as well as other work benefits and the amounts that each should receive. Along with the amounts that each employee should receive for time worked or tasks pe ...

automation is integrated into the company's

enterprise resource planning Enterprise resource planning (ERP) is the integrated management of main business processes, often in real time and mediated by software and technology. ERP is usually referred to as a category of Business management tools, business management ...

system that provides an overall view of the company's or community's finances; in addition to payroll, it can manage customer relationships,

production Production may refer to: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a stati ...

, personnel resources,

invoicing An invoice, bill or tab is a commercial document issued by a seller to a buyer relating to a sale transaction and indicating the products, quantities, and agreed-upon prices for products or services the seller had provided the buyer. Payment t ...

and

accounting Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...

Payroll activities

Payroll management consists of several stages and procedures that require expertise in financial administration, such as employment contract management. Payroll management performs the following tasks: * Timekeeping: knowing hours worked, and when (to know when

overtime Overtime is the amount of time someone works beyond normal working hours. The term is also used for the pay received for this time. Normal hours may be determined in several ways: *by custom (what is considered healthy or reasonable by society), ...

pay applies) * Calculating and paying wages, settlement of tax withholdings * Delivery of wage calculations and certificates to the employees * Compiling statistics for different authorities, and for the purposes of improving activities * Drawing up employment contracts * Providing regulatory reports to the tax agencies and insurance companies * Calculating annual holidays * Managing deductions for employee benefits The travel costs and travel invoices from the employees are usually processed together with payroll.

Methods

Payroll functions can be automated using software to facilitate the collection, organization and storage of all information required for payroll calculations and regulatory agency reportage requirements. If the payroll software is not purchased as part of a comprehensive business management system, it can usually be combined with the company's existing solutions for accounting, sales ledger, working hour management and recruiting. Information that has been captured in one part of the system can be used by other modules. Hours registered in the work management system, for example, are automatically transferred to the wage calculation system.

Benefits

Effective payroll automation collects all relevant information in one place in electronic format, reducing mistakes by eliminating the need to synchronize and manage otherwise duplicate data sets. Well planned, modern payroll software provides the following benefits: * It considers collective labor agreements and employer-specific procedures and exceptions. * It provides a breakdown of the allowances and other bases for wages in the report, with dedicated rows for each day, week and month. * It automatically follows the legislated accounting and calculation rules in the calculation of annual holidays. * It manages the drawing up, posting, archiving and reporting of travel invoices. * When combined with work shift management software, it can utilize data concerning working hours, overtime, allowances, holidays and absences.

Related concepts

* Robotic Process Automation (RPA) * Onboarding Automation

Sources and references

{{Reflist Information systems Payroll