Payroll Automation and Outsourcing

According to a recent study, Spain is among the 15 countries with the most complex payroll processes. This is significantly better than in 2021, when we were ranked fourth. However, it is still an indicator that the payroll process is not straightforward.

In the management of a company’s payroll, there are a number of economic and fiscal processes to which a lot of attention needs to be paid. Submitting a payroll manually means going through each of the required data. Entering the incidences of each employee, calculating their IRPF and payroll or adding social security deductions are repetitive and mechanical, but at the same time complex tasks.

These processes, as mentioned above, can be of two types: economic and fiscal. Within the economic processes we can find the actual calculation of the payroll according to the hours worked or the extraordinary bonuses. In the fiscal processes we have matters such as personal income tax deductions or calculations of salary in kind.

Constant repetition of processes can be time-consuming and can undermine concentration, which can lead to errors. Rushing to complete tasks or losing focus due to repetition are the main causes of these failures, which in turn translate into problems for the company.

That is why payroll automation is essential for efficient business management. Payroll automation is a set of processes related to payroll management that are carried out by software. With such software, payroll management becomes an easier task. The time savings and reduced workload achieved by automation is the main, but not the only, advantage of this method.

Benefits of payroll automation

Implementing technology to perform the mechanical calculations and processes is a way to save time for the most essential tasks. It is also a way to save money by maximising time efficiency. These are the easiest benefits to see when we talk about implementing automation in our payroll management. However, they are not the only ones. Below, we will detail the main benefits of computerising your business payroll.

Work without errors and always on time. Humans make mistakes, and these tend to increase when we are performing mechanical tasks that cause us to lose concentration. Machines, on the other hand, are not distracted. By automating repetitive calculations and processes, we ensure that they will be correct, as well as getting them done in much less time.

It also means better time planning, which helps us to always deliver on time. Computer time estimates are more accurate than human time estimates. This can allow us to work in the knowledge that payrolls will always be on time. By eliminating delays caused by human error, we can deliver payroll to our employees on time and on budget.

Keep up to date with legislation. The legal system is constantly changing and being revised. This means that legislators are constantly updating regulations on matters such as the form of payment, the taxes that must be withheld from workers or the way in which information about their salary is sent to an employee.

Keeping up to date with all the legislative changes is an almost impossible task, even more so if we do not have an in-depth knowledge of the law. That is why having an automated payroll helps us to comply with the different laws. Automation software is always up to date with current legislation. Payroll automation is a way to comply with labour and tax regulations, while avoiding possible fines or penalties that may result from non-compliance.

Increase transparency and employee autonomy. Having specialised payroll software makes it easier to access and modify data. Thanks to these programmes, employees can consult any information they need without having to go through the Human Resources department. This increases transparency within the company, as data that was previously difficult to access is now available to our employees.

It also increases the employee’s autonomy when it comes to modifying this data. If an employee wants to change any information, such as their residence or the account into which they want their salary to be paid, they will be able to do so whenever they wish. Having access to this programme avoids having to ask someone else to modify it for them. Thus, the data will always be up to date, and at the same time we reduce the workload for Human Resources, which will not have to be aware of this type of updates.

Improve employee satisfaction. Digitising payroll can undoubtedly increase employee satisfaction. It is very common for delays in receiving payroll, payroll errors or lack of transparency to undermine the level of employee satisfaction.

Having an automated and digitised payroll means putting an end to these problems, reducing dissatisfaction with these issues and thus increasing employee productivity.

Outsourcing payroll is the best form of automation

As we say, automation is possible thanks to specific programmes. These softwares allow us to optimise many of the procedures that are necessary to present the payroll to our employees. But having an automation programme is not enough to manage a company’s payroll. It is also necessary to have staff who know the process well and who manage this programme well. There is no point in having the tool if we do not have the necessary knowledge to make it work properly.

That is why payroll outsourcing is often the most efficient option. Back Office companies offer their services to other companies to manage all these processes. As they are specialised in it, they have the best software on the market, as well as a staff with expertise in everything related to payroll. This allows them to manage a large number of payrolls per month, always complying with deadlines and legislation.

One of the most important factors when automating payroll is the communication between the supplier’s and client’s software. For these softwares to work correctly and to be able to see the positive results of automation, the data must be compatible. If two systems, no matter how good they are, do not understand each other, the outsourcing will fail. That is why it is important to have a software optimisation process.

As with software, communication between the supplier and the client must also be fluid and constant. For outsourcing to be successful over time, it is necessary for both parties to be in contact. Having the facility to communicate any problems or doubts about the payroll is just as important, if not more important, than compatibility between the systems.

At Vasalto, we have been working in payroll outsourcing for more than 30 years. During these years, we have worked hand in hand with a large number of clients who are leaders in their respective sectors, which gives us a great deal of experience in the sector.

We are present in several countries, with headquarters in Madrid, Barcelona, Porto and Bordeaux, and we have clients all over the world, as well as collaborators in more than fifty countries. Furthermore, Vasalto is a purely technological company, which is why we have a series of our own computer systems that allow us to manage more than 40,000 payrolls every month. In addition, we also have the best legal and accounting advice, in order to offer our clients the best possible service.

If you are interested in finding out more about payroll outsourcing, at Vasalto we will be delighted to help you. Contact us to get to know us and see how we can help your company.