Economy and speed: the (not-so-secret) ingredients of the digital payroll

Of all the duties in the world of work, "generating payroll" is king.

If, as a human resources manager or CFO, you are looking for a magic formula to carry out this process correctly and expeditiously, you've come to the right place! Everything you need to know can be summed up in two magic words: electronic payroll.

Going from a paper-based payroll to the implementation of a digital payroll brings you advantages as if by magic! We present them to you in this article along with the "secret potion" to obtain them.

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What is electronic payroll?

Payroll is a document that supports the payment of wages, salaries and deductions of employees. The general structure of the payroll or payroll format must include the following minimum legal information:

• Gross salary,
• the net salary,
• social security contributions,
• paid holidays,
• deductions,
• overtime, etc.

Payroll, commonly generated and stored in physical form, can now also be documented digitally.

This means that the electronic payroll is the digital equivalent of the record of payments or credits that is filed in a physical space. It therefore has the same validity as the physical payroll.

The electronic payroll, on the other hand, is the digital equivalent of the record that is filed in a physical space, which has the same validity as the payroll. It is produced monthly and must include the minimum legal information:

• Gross salary,
• net salary,
• social security contributions,
• paid holidays,
• deductions,
• overtime, etc.

Why is electronic payroll important?

Implementing electronic payroll in your company offers a number of immediate benefits:

• Accessing automatic updates, thanks to constant scheduling and monitoring.
• Greater mobility in terms of the information available in the cloud, which can be consulted from computers, tablets and smartphones.
• The possibility of integrating electronic payroll with other business processes such as e-signature and e-invoicing.
• Ensuring data protection.

This also translates into the specific advantages detailed below.

1. Process automation

Forget about doing your payroll in Excel! When you opt for digital payroll and rely on specialised software, you can automate processes, concentrate on strategic tasks and save time. The software performs for you tasks such as:

• Editing payrolls,
• sending pay slips,
• counting of paid leave, etc.

The digital payroll is easy to transmit for administrative or legal purposes, as it is digitally generated and signed.

2. Economy and scalability

Forced to generate payroll for the entire workforce, employers can see significant time and cost savings by opting for an option that facilitates the automation of processes and avoids spending on paperwork and IT equipment.

When a company relies on an IT solution such as online software, for example, it can tailor it to its needs. And if you later need to make changes as your business structure evolves, you can even make payments to as your business needs change.

3. Reduced errors

Digitising payroll also reduces the risk of errors due to manual data entry by automating this task. Entrust your tasks to an online payroll solution and spend less time correcting errors or resolving disputes.

4. Transparency for the team

Electronic payroll tools increasingly integrate collaborative working. In the case of payroll software, employees can access their payslips, check their leave, holiday balances, overtime, etc.

In addition, you can set access rights to different modules or functions, according to the user's profile. The HR department has access to the entire solution, while access permissions are set for employees.

5. Regulatory compliance

E-payroll solutions cover the legal obligations in this area. In addition, many of them offer tax management, including the different tax rates applicable.

6. Analysis and reporting capabilities

Because all data is digitised and stored in one place, the information can be exported to generate customised and synthesised reports. With the data extracted from each employee⋅a digital payroll, optimal monitoring of trends and indicators can be carried out.

7. Interoperability

As mentioned above, e-payroll solutions or platforms are usually very comprehensive. Therefore, they have the advantage of HRIS functionalities that allow you to integrate expense reports, leave reports, absence reports and overtime management into your payroll tool.

How do you automate payroll?

Nowadays, automating employee payroll is quite simple and practical, thanks to advances in technology. Remember the "secret potion" we told you about at the beginning of this article? You're about to find out what it is.

1. Choosing payroll software

There are many options on the market, which adapt to the needs of your organisation, whether it is a private company or a public administration.

There are even solutions such as Grupo Castilla that handle both. That is to say, its payroll software not only takes care of accounting integration, cost centres, special regimes or retirement pensions, but also of staff and job listings, public employment offers and file management (SEPE and RED systems).

2. Customise the payroll

Depending on the requirements of your company, you may be interested in adding the following additional information to the elements that make up a payroll:

• Company logo and image,
• contractual particularities and existing positions,
• sector/type of company (collective agreement),
• bank reconciliation,
• overtime pay,
• professional category and contribution group,
• integrations with other systems: accounting, time and attendance, etc.

3. Include legal obligations

If you have a solution for digital payroll generation, this aspect is covered. However, don't forget to take care to include information regarding:

• Company and employee details⋅a,
• pay period,
• contributions and taxes,
• pay.

4. Schedule payroll

This involves scheduling the payment of salaries and the subsequent sending of the payroll via e-mail. It can also remain available to the employee on your payroll platform.

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To sum up...

• The payroll is a document that compiles the support of costs and deductions that a natural person receives at the end of an established period, as a result of the employment relationship that he/she has with his/her employer.
• The electronic document equivalent to the physical payslip is known as the digital payslip and has the same validity.
• The advantages that electronic payroll offers companies include:
  • Automation and interoperability of processes,
  • cost and time savings,
  • legislative compliance,
  • optimisation of workflows.
• Part of the process of moving from paper to digital payroll lies in implementing a payroll software or platform.
• The right choice of payroll software depends on several elements such as:
  • The size of your company,
  • the sector of activity,
  • the budget available.