Paying employees accurately with all the correct calculations and deductions is of paramount importance. When you are making these calculations manually there is always the possibility that you could get something wrong. When that happens, you could underpay or overpay an employee.

Neither of these scenarios is desirable. That’s why it’s easy to see why using a product created by a company like eddy, who offer an easier, accurate, and less time-consuming solution with their HRMS payroll software.

Here is a look at some of the most substantial disadvantages of operating a manual payroll, all of which will likely lead you to the conclusion that automated software that does all the hard work for you, is a real no brainer.

There is always the risk of human error

Payroll deductions and calculations can be hugely complex, when you are dealing with a range of employees who have different tax codes and deductions to work out.

There is also the issue of things like allowances and expenses to get right. All of these can be prone to human error when making the calculations. Payroll software that works all of this out for you is far less likely to come up with incorrect computations.

Personal data can be more easily breached using a manual system

Paper copies of sensitive payroll data can easily fall into the wrong hands or be viewed by unauthorized personnel. You will find it easier to maintain a higher level of data security and integrity using a software system.

Manual payroll is much more labor-intensive

Quite simply, there is no comparison between the time taken to generate a payroll run using specific software and how many hours it can take to do the same task manually.

You can free up HR staff from this arduous task when using payroll software to do it for you instead.

Control of documentation is harder when using a manual system

We all know how easy it is to lose a piece of paper. When you are calculating the payroll manually, there is always the risk of losing documentation. It is also more challenging to reproduce payroll documents without the original.

You can fix this problem by using payroll software, which makes it easier to retain and reproduce documents.

Harder to maintain compliance

Non-compliance issues are not something you want to contend with when it comes to payroll. The problem is that it is much harder to maintain compliance with legislation when you are relying on manual calculations.

Payroll software is constantly updated when rules and regulations change. This makes it easier to maintain compliance.

A lack of payroll accuracy can lead to employee problems

Employees want to be paid accurately and on time. This can be more of a challenge with a manual payroll system.

Incorrect deductions or late payments are one of the quickest ways to negatively impact employee morale. Using payroll software reduces that risk.

Using a manual payroll can be too time-consuming

There is very little debate when it comes to which is quicker, when comparing how long it takes to generate a manual payroll to an automated payroll system.

When you pass on all of your payroll duties to a software company that specializes in this area, you will save time and money.

Limited reporting capabilities

Another major drawback of using a manual payroll is that it is much harder to generate reports that allow you to analyze costs, individual employee records, or anything else that you want to be able to check using payroll data.

When you use a specific payroll software system, it gives you access to a whole range of reporting options and capabilities, all at the click of a mouse.

A manual payroll is difficult to maintain as your business grows

Businesses very rarely stand still. That means you will have employees leaving and new people starting on a regular basis.

All of this administration becomes harder to keep on top of when you are trying to work with a manual payroll system. As your business grows and evolves, you will want a system in place that is easy to maintain and offers flexibility when it comes to adding and removing employees.

A manual payroll simply can’t compete with the ease and efficiency with which you can perform these regular tasks when using payroll software.

Your money can be better spent

Cost efficiency is something that every business should strive to achieve. Spending money where it will deliver the greatest return will provide financial rewards and a higher level of satisfaction.

Hiring employees is always going to be a costly exercise. There is money to be spent on getting them trained and equipped. This normally involves purchasing hardware like a computer and a workstation, all of which cost significant sums of money.

If you are spending employee time and money on doing all of the administration and calculations attached to administering a manual payroll system, you could be spending that money more efficiently elsewhere. The money you save on HR costs by outsourcing your payroll to a software option could then be used to spend on capital expenditure and other more positive things than payroll administration.

These are just some of the prime examples why it would make sense to question whether running a manual payroll is such a good idea. When you consider how cost-effective, accurate, and efficient payroll software is, it becomes very hard to argue against the idea of switching to this option and ditching your manual calculations altogether.

As you can see, manual payroll system management can drain a lot of your resources and time. As your company grows and the number of employees on your payroll expands, the administrative burden becomes even greater.

Do you really want to be calculating salaries each month when there is a much more viable alternative that will do all of the hard work for you?

All things considered, the advantages of using payroll software, compared to the numerous disadvantages of doing the calculations and administration manually make it an easy decision as to which option to choose.

Guest writer.