Payroll is an essential aspect of a business. Not only do employees expect to be paid on time and accurately, but payroll can also affect the morale of employees, and it also reflects the financial status and stability of the business.
Typically, payroll is managed by the Accounting or HR department. The accounting department might handle the payroll, benefits, and taxes for some organisations. In contrast, the HR department handles the maintaining of employees records. Larger organisations might even have the capability to open a specific payroll department that purely focuses on payroll management.
Nevertheless, the effectiveness of a business in managing its payroll determines its success. Here are some reasons how good payroll management leads to your business’ success.
Compensation
The key factor of payroll allows employees to be aware of their work value. The total compensation included in the payroll consists of their basic salary, bonuses and benefits, and allowances. Depending on your business structure, the department that handles payroll management must ensure that all this information is correct and accurate and sent out on time.
Benefits
In some organisations, employee benefits are managed together with payroll. Employee benefits include the number of leaves, essential work insurance, CPF contribution, and relevant rewards that are unique between employees. Payroll management includes keeping track of such benefits and ensuring that the employees receive the appropriate benefits.
Morale
The most important aspect of a company is building the morale of its employees. Accurate and efficient management of payroll indicates that the organisation values their contribution. Besides that, the accuracy and efficiency of good payroll management reflect the organisation’s financial stability. If employees’ payroll is late, they might question the organisation’s financial status. This might build up and result in a loss in morale, leading to employees feeling insecure about the future and therefore underperforming in their duties. Hence, good payroll management means that businesses are able to maintain a high level of morale among their employees.
Record Keeping
Payroll management involves working on any discrepancies in the business’ payroll data. On top of that, it also involves maintaining and ensuring that the payroll records are correctly kept and within the record law imposed in the nation. For instance, Singapore requires organisations to retain an employee’s last two years record. If they have left the company, they must keep this record for only a year.
Tax Filing
Besides accurate and timely compensation, good payroll management involves tax filing and appropriate deductions. The most crucial time for payroll management is during the end of the year. The organisation must accurately record employees’ yearly earnings throughout the year for proper tax filing. Also, to prevent incurring huge fines, the organisation needs to ensure that the proper tax amount is being deducted. Suppose you are a small business that needs professional taxing solutions. In that case, AG Singapore provides small business accounting services that ensure your organisation meets professional standards.
Conclusion
For most organisations and businesses, the responsibility of payroll management falls under HR. Hence, the HR department plays a significant role in supporting the employees and the entire corporate structure.
Payroll management involves more than just handling the payment of salary. It consists of the accounting, finance, and even banking institutes to ensure employees get what they deserve. Good payroll management ensures the stability of the employees’ morale. It increases productivity, which will, in turn, lead to the growth and success of the organisation for a long time.
If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.
