8 Benefits Of Cashless Payroll Processing For Small Business
As an SME business owner, one has to play multiple business roles and usually multi-task, since they are always on the go. One must be able to manage accounting, marketing or many other similar tasks and it is important to simplify such a never ending to-do-list.
One such highly important activity is the payroll services for the employees. Usually to manage this, SME’s prefer to outsource payroll services. However, now SME’s can try the new cashless online payroll solutions available in the market. The benefits of using such services can add up in the long run and the recent demonetisation effect and cashless movement has opened up new opportunities. Read here on how to implement HRMS in your business.
Even though few people have shown resistance towards the cashless movement, if electronic monetary systems will be successfully implemented across sectors and organisations, people will necessarily have to accept the new cashless system. Cashless payroll systems provide various advantages to the organisations and it is easy to understand why everyone will gladly accept it, without having to be forced into. Listed below are few such advantages that organization will receive with cashless payroll processing for their employees.
1. Improved efficiency
The more efficient and secure a business can be operationally, the more convenience and focus it can provide to its customers. This will result in the company becoming more profitable. Cashless payroll systems are completely eliminating manual processing, thereby resulting in saving time, effort and cost. Moreover, all systems and tasks can be managed seamlessly and systematically. This benefits in faster transactions and employee satisfaction. Cashless systems operate faster than cash systems and the staff will not have to wait for long to receive their salaries. Read here on boosting employee productivity with HRMS.
By using traditional payroll systems, there are very high chances of making calculation errors, especially while paying in cash. However, with the online cashless payment software, the entire process is automated and transparent. The payroll system can be connected to the internal human resources system and the auto credit system facility can be used. Since no money is passed through hands of people, errors which are usually caused due to miscounting, currency misplace or stolen, is completely eliminated. Avoiding such errors will also lead to increased employee satisfaction due to a reduction in risks.
The more secure a company’s assets are, the more profitable it will be. No cash means all the concerns with respect to managing cash are completely gone. It leads to greater security and reduces the risk of managing and handling cash. Additionally, online payroll solution or cloud based payroll management offer secured payment and cash transfer services. Another security risk which will be completely eliminated by using online cashless payment software is of counterfeit currency. Since these are cloud based systems the chances of anyone injecting fraudulent funds is completely eliminated.
4.Eliminate cash handling cost & save time
Managing cash is a big security concern. In many companies a separate individual has to be appointed to only man the currency based transactions. Usually the managers keep checking and counting the cash, atleast twice in a day, so as to eliminate all errors and risks. However, this process requires a large period of time and alot of effort to continuously handle the cash. Since the cash does not have to be balanced and checked daily, it saves time to manage such cash. The time saved by SME’s is precious and can be invested in finding more customers. SME’s don not seem to realise that paying employees in cash is often costlier than paying through electronic mediums.
5. Simple for employees to use
According to the ministry of manpower, two-third of Singapore’s business use cashless payroll processing systems (Source). Many foreign workers, especially in construction and marine industries, receive their salary electronically. This not only makes it easier for agencies to track if the employees have been paid, but also simpler for workers to transfer or remit money home more easily. Such system is also helpful to the employees to track their spending by making digital payments and keep a record for the same. By automating payroll deductions, it will also avoid the operational hassles for the payroll department.
6. Timely Payroll process
The workload and time spent by the accounting department, with respect to salary processing for employees, can be considerably reduced by using cashless payroll systems. This also helps in improving reporting and controlling processes. In such cases, employees need not to wait for receiving their salary, since all employees get paid at the same time. The main objective of any effective payroll system is to make sure that people get paid in time and they are getting paid the right amount.
7. Management information
Drafting and finalising financial reports for SME’s is another challenging task, which is also, time consuming. Online cashless payroll processing can generate automatic reports and detailed information, like a summary of payroll by departments, timesheets, expenses, etc. This helps companies maintain their detailed records of business financial history. Such instant information also helps organisations track their funds and not lose the opportunity cost that such funds can generate for the company. Using online cashless payment software also ensures confidentiality of salaries reliably.
8. Avoid Frauds
Payroll systems are a massive source of accounting frauds and employee thefts. If a company deals in cash, then it essentially does not have proper controls and is vulnerable to payroll frauds. Since cash is hard to control and difficult to track, it automatically becomes an instrument to commit frauds. Payroll frauds could include ghost employee frauds, especially in offshore location cases, incorrect time sheets of time sheets, faking illnesses to collect sick leave payments or false expense report frauds by inflating and falsifying expenses in order to receive extra cash. Automating the payroll on cloud, will track all processes in an organization which can avoid such frauds.
Studies have shown that switch from traditional to cashless payment solutions can save up to 50% of company’s payroll administration cost.
Technology in today’s time is moving very fast and small businesses will have to keep the pace with the speed. SME’s should get educated on how best to adopt new cashless payroll systems and satisfy the employees with faster & automatic processing systems. They do not have a need to accept the pains of paying in cash. Cashless payrolls services save both time and money and often reduces various risks involved in paying in cash.
By using automatic payroll process system & using right tools, SME’s can feel a significant difference, as such systems become a single window for all payroll related matters that make the lives of employees and payroll managers much simpler and easier. Opting for a payroll system can greatly reduce human errors, the risk of losing money to as close to zero as possible and can help employees deliver more value to businesses and meet their goals. It is doubtless that employees also become happier when they have clear visibility of their payroll, deductions, taxes, etc. The value of timely and accurate cashless payroll system is undeniable for a small business. When a climate of an SME translates into happier employees, it also translates into happy customers which lead to more profits and new opportunities for the business to flourish.
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