5 Benefits of an Automated Payroll Software

5 Benefits of an Automated Payroll Software
5 Benefits of an Automated Payroll Software


Having automated payroll software has become a necessity nowadays with the rapid pace at which technology and the business world are advancing. While the concept of automated payroll management is not new, it is the implementation that has changed drastically in the last decade.

Since the older generation of payroll management software was desktop-based, it had limited functionalities and was most useful in undertaking the calculations and helping with record-keeping. The later generation of payroll software based on client-server architecture introduced the concept of integrations and comprehensive dashboards as they possessed enhanced functionalities.

Authentic innovation came with the advent of cloud-based payroll software that was able to take advantage of all the multiple benefits provided by the cloud architecture. The companies deploying such systems loved the no-maintenance interoperability and anywhere accessibility of this new software architecture.

Hence, let us take a look at 5 of these benefits that automated payroll software provides a company:

Benefits of Automated Payroll Software

Having an automated payroll management system provides several advantages when compared to manual work such as:

1. Error avoidance

The term ‘automated’ in the phrase ‘automated payroll management’ ensures that all kinds of human errors are removed from payroll processing and management. Payroll software even takes care of incorrect data entries by verifying the data entered and alerting the user in case the values are not within the predefined range.

Avoiding human errors is a tricky thing to do, especially in the case of payroll management since it requires a lot of permutations and combinations. Additionally, the requirement of statutory compliance further complicates an already complex process. Automated payroll software can take away all of the stress associated with payroll processing and ensure statutory compliance as it automates both of these tasks.

2. Improved efficiency

Any HR would vouch for the fact that payroll processing is a time consuming and hectic task. Using manual methods, it may take days and even weeks to complete the process depending on the size and diversity of the designations. Additionally, cross verifying all of the input data also takes a toll on HR.

Having the option to process payroll automatically helps in drastically increasing the efficiency of the HR department as the time required for it gets reduced drastically. The time saved in this manner can be used to improve other aspects of employee management. Hence, having an automated payroll management system helps in increasing the overall HR efficiency.

3. Reduced costs

Statutory compliance is a part of payroll management and failing to adhere to even a single legal regulation might result in hefty fines and penalties for the company. Hence, companies tend to avoid payroll processing altogether by outsourcing it. However, the additional costs incurred in hiring a third party to perform this task is huge. Hence, automation is the way to go.

Additionally, companies employing an automated payroll system need fewer staff in the HR department. This greatly reduces the operating costs of the company. Even if you have an excess amount of HR personnel, they can be reassigned to help improve the employee engagement rate and employer branding.

4. Secured database

Since payroll management deals with financial transactions, it is required by law to keep the records safely for a predefined amount of time. It is cumbersome to save these records on physical paper copies. That is why companies usually prefer spreadsheets to accomplish this task. However, even spreadsheets are prone to human errors and data integrity issues.

Once again, a payroll management system benefits the HR team in this scenario since it can securely store the database on the cloud itself. With the popularity of cloud-based payroll software, it has become much easier to provide access to this data remotely at any time with the help of secure passwords. As a result, it becomes easier to access a specific record at a later date since it is categorized and stored digitally.

5. Easy reporting

Deducing valuable information from a huge amount of data is a time-consuming and complicated task. Even with the help of spreadsheets, it is quite complicated to arrive at meaningful deductions based on the data available at hand. It also becomes cumbersome for HR if the upper management requests a specific set of data for any purpose.

On the other hand, automated payroll software can provide any kind of information required within a few clicks. It can generate custom reports for easy accessibility to the data. Modern payroll software even employs artificial intelligence to provide deduce meaningful inferences from the employee database. It can also help in deducing a pattern and taking corrective actions if required.


From this article, it is clearly visible that deploying automated payroll software helps the HR personnel immensely. While we have discussed five of the common benefits of automated payroll, its benefits go a long way in improving HR efficiency and employee satisfaction, and engagement with their company.