Minimize Risk With Payroll Online
While it isn’t foolproof, technology can often avoid and even detect errors the human eye may overlook. Despite their best efforts, people make mistakes, especially when they’re expected to perform hours of work, day in and day out. Just one wrong number can throw off an entire calculation.
Providentially, it is probable to decrease the risk of costly errors, specifically with a robust online payroll system. Read on to understand better how this process works.
1. Errors and Online Payroll
Running payroll online eliminates much of the risk associated with payroll calculation errors by merely reducing the opportunity for them to arise in the first place.
Without an online payroll system, calculating pay for all employees looks something like this: Each pay period, someone on the payroll team calculates the hours and the owed amount manually.
While this method may work when a business is new and relatively small, the risk of making costly errors rises exponentially as more employees are hired.
With an online payroll program, one enters the employee data just once. Additionally, after the employee data is entered, the program figures out wages for the pay period by calculating hours, withholdings, and other details. It works the same way for each employee and uses their account details to make correct calculations.
Because online payroll programs present fewer opportunities to enter incorrect information, the risk of making a mistake is greatly minimized.
2. Errors and Taxes
When payroll is calculated correctly, it’s much easier to make accurate estimates of company and employee earnings throughout the year. As a result, gathering necessary documents when tax season rolls around is so much more convenient, reducing the risk of audit.
While audits are not always the individual’s fault, nor are they still avoidable, having correct earnings information makes the chance of being audited less likely. Should the company be audited, having detailed documentation helps clarify any issues quicker than what might occur with self-inserted data information?
In addition to keeping earnings information accurate, payroll systems can help assign your company to the correct tax rate. Maintaining the right price can significantly reduce the risk of being issued penalties later in the year.
3. Payroll Systems and Security Risks
Having outdated and unsecured payroll systems can expose your company to an array of security risks. Because employee and business information is stored in these systems, the company runs the risk of encountering identity theft, falsified documentation, and other forms of theft, including embezzlement.
Most online payroll systems include some form of security measures designed to reduce these risks. Because online payroll systems usually come equipped with robust security measures, it is improbable that anyone who should not have access to your company’s most sensitive information will be able to access it.
What’s more, the fact that a single person is not in charge of all company payroll reduces the risk of corruption within a business itself.
4. Bottom Line: Payroll Online Just Streamlines the Entire Payroll Process
Online payroll systems are cost-effective, especially when it comes to ensuring your company’s tax compliance and correct calculation of employee payments. Because software is often more accurate than the human prediction, it’s easy to understand why so many companies from small to large have opted to use an online payment system.