When it comes to accounting services, payroll errors can occur more quickly than you might expect. Imagine what would happen if your employees were not paid correctly or if their salaries were not issued on time. To avoid such scenarios and keep your employees satisfied and compliant with the law, it is imperative to have a clear understanding of payroll and manage it effectively.

What is Payroll? 

It is a document that comprises a list of all of a company's workers who are paid for their work done or services provided to the company. It summarizes the total amount of money paid to employees by a company over a given period.  

Steps to Manage the payroll Process 

The payroll management process consists of a series of regulated processes completed in the same sequence each month to establish a payroll cycle. It is all about determining what is payable to the employees, i.e., Net Pay, after all, applicable tax adjustments and deductions. 

There are three stages of the payroll process 

Pre-payroll process:  

It includes the following: 

Describing payroll policies: Payroll policies must be established and approved by management to make sure that payroll processing and administration are carried out consistently. When processing payroll, the company policies are taken into account: Employee Pay Policy, Time & Attendance Policy, Reimbursement Policy, and Leave and Benefits Policy. 

Gathering input: The payroll process requires communication with a variety of departments and individuals. There could be data such as mid-year salary revisions, attendance data, and so on. The gathering of inputs is not an issue if you use smart payroll software with features like attendance and leave management, employee self-service platform, etc. 

Validating input: After the input has been gathered, it's time to check for compliance with company policies by validating reimbursement proofs and investment declaration bills and adjustable payout inputs. You must also ensure that no current employees are neglected and that no inactive employee data is included in the salary payment process. 

Actual payroll process 

The verified input data is then loaded into the payroll system for actual payroll processing. The outcome is the net pay after managing appropriate taxes and other deductions. To avoid any problems, it is always a good habit to reconcile the data and verify for accuracy once the payroll process is completed. 

Post-payroll process:  

It includes the following: 

Statutory compliance: At the time of processing payroll, all statutory deductions are subtracted. After that, the company sends the money to the appropriate government entities. The frequency can differ based on the type of dues. 

Payroll accounting: Ensuring that all salary and reimbursement details are entered appropriately into the accounting/ERP system is an important element of payroll management. 

Payout: After you have completed payroll, double-check that the company's bank account has enough money to cover the salary payment. If you choose payroll software with an employee self-service portal, you can publish invoices, and employees can view them by logging into their accounts. 

Find the right payroll management services for your business 

Payroll management is very important for every business to keep the employees' pay in check. If you are unfamiliar with the process, Whiz Consulting can help. It provides many services like accounting services, payroll management bookkeeping services, outsourced bookkeeping services, and much more. Visit their website to know more.