Running a business consists of thousands of little steps every day. There are many tiny tasks that make up the overall organization to keep things moving forward. Payroll is an important one.
Like many areas of business operations, technology is changing how businesses process payroll. This change not only stems from the pertinent technology developments regarding how payroll is processed, but also how said technology is changing the world as a whole. More businesses are abandoning the traditional 9-5 salaried worker model and using remote capabilities.
With that in mind, here are four payroll trends that prove that the future is happening now:
An All-in-One HR Service Bundle
Once upon a time, HR and accounting used different tools to manage employees. As payroll overlaps both HR and accounting, this model often led to create communication challenges. Different systems don't always speak to one another in a streamlined manner. The disconnect creates the potential for error, as well as the repetition of low-value work.
As a result of these challenges, more businesses are looking for HR Payroll Systems that handle all things employee-related. These functions can include anything from processing payroll and tax forms to managing applicant tracking and employee onboarding.
Having a streamlined approach improves employee engagement, reduces busy work, and ensures collaboration and communication between various departments. Furthermore, having one system to do it all often cuts back on the expense of hosting two separate interfaces.
Contractors and Freelancers in Payroll
2019 has been the rise of the gig economy. More businesses-- startups in particular-- are seeing the value of outsourcing rather than hiring full-time employees. By doing so, the company can manage the relationship and take on less of the paperwork than a W-2 employee entails. On the other side of the equation, more professionals see the value in offering their skills to many businesses on a part-time basis rather than devoting themselves to one.
One of the common misconceptions about hiring a contractor or freelancer is that there is no paperwork to consider. However, there are still taxation considerations, as well as payment processing.
Many modern payroll services are starting to incorporate options for contractors and freelancers such as making one-time payments. This also keeps the information stored for when tax forms need to be submitted to the regulating bodies and creates an environment for repeat payments to preferred contractors.
On-demand payment is slowly starting to replace the traditional bi-weekly or monthly payroll schedule. This change is primarily due to the increase in one-time fees for freelancers and contractors. Many of these individuals expect prompt payment rather than being added to the employee cycle.
Some businesses are carrying this option over to their traditional 9-5 employees and shift workers as well. Presenting the opportunity to get paid for a shift the day you work is appealing to a lot of employees. This option can help regulate spending and offset debts incurred when a problem arises before payday.
Of course, having this option available often necessitates a change in business operations as a whole. Having employees take money when they choose to do so could make for some interesting accounting practices and cash-flow implications. While the end result is the same as far as money leaving the business, processes will have to reflect the flexibility.
Another consideration with on-demand payment is that many modern employees are going bankless. Instead, they're opting to manage their own money using services like PayPal. This trend is expected to continue as more people adopt the remote lifestyle of the growing gig economy.
AI and Cloud Computing
AI and remote technology have drastically changed the face of business in recent years, and the shift is far from over. These advances have also changed how payroll can be processed.
With AI, payroll processing can become almost entirely automated. Generally, having an AI payroll system does the work for you and asks you to approve it before submitting. It can track schedules and determine when someone has missed a clock-in or clock-out, significantly reducing errors from traditional time cards. Furthermore, these implications save a lot of time and opportunity costs for those that are relegated to processing payroll manually.
Cloud computing provides an opportunity to process payroll from wherever you are, so long as there is an internet connection. This advancement allows businesses to operate as usual and offers organization leaders more freedom.
Furthermore, the cloud replaces the need for traditional infrastructure. Rather than having to make a significant investment when your business expands, the scalability and flexibility of cloud computing reduces the cost of success.
Preparing for the Future
Payroll is just one of the many businesses processes that are evolving as technology changes the world around us. By getting ahead of the curve and implementing these changes, you can gain an edge on the competition. As the saying goes, adapt or face extinction.
This guest post was written by Ashley Lipman and may not be copied or published without permission.