Digital Payroll - How HR and Management Save a Lot of Time
Nils Martens5/4/2022
What you need to know about digital payroll, what advantages it has, and which tools you can use for it.
Save time, comply with legal requirements accurately, and have satisfied employees. We should not have to mention anything else in this article to make it clear that digital payroll accounting is an added value for every company. However, we will take a more detailed look at the topic and give you some tips.
Processes in the HR department are among the most time-consuming. During the digitalization of companies so far, it has therefore appropriately been shown that HR is usually the first to be digitally optimized. Recurring to-dos such as the transfer of salaries or Recruiting measures are at the forefront.
How you implement digital wage accounting in your company, what advantages this has and which HR-softwares provide you with the best support, we will reveal to you briefly and succinctly!
What are the differences between digital payroll accounting and electronic salary accounting?
While online banking has played a role in wage and salary payments for many years, digital payroll accounting is still in its teenage shoes. Although the beginnings have been made, not all companies are already digitalized in this area.
Roughly speaking, you can use electronic salary accounting synonymously with digital payroll accounting - except for the fact that wages and salary are not the same! If you like to be more precise, the electronic salary accounting only refers to the electronic transmission of the accounting, for example as a PDF by email.
The digital payroll accounting refers to the entire process that takes place in the HR until employees have been transferred the salary payment agreed upon for their work. This includes tools that provide wage statements digitally to employees, give you an overview of all salaries and, in the best case, handle online banking.
We are less precise in this article and speak of digital payroll accounting from now on. Sounds much more modern in the context of digital transformation!
What are the advantages and disadvantages of digital payroll accounting?
Basically, we can skip the part about disadvantages. In addition to a high amount of time spent on the conversion from analog to digital and the training of the workforce in new IT structures, there is not much to mention in terms of disadvantages.
The list of advantages of digital payroll accounting quickly exceeds the 5-point limit:
- Time savings through purely digital workflows.
- Searching for information about and for employees is reduced, as paper files no longer need to be searched.
- Saves a lot of paper.
- Saves a lot of money.
- Saves a lot of space, as no filing cabinets are needed anymore.
- Compliance with legal framework conditions through digital tools.
- Data protection and security is a top priority. Paper files, on the other hand, are easily accessible.
- Time savings through digital payroll accounting in HR can lead to better handling of employees.
- All those involved have a quick and good overview of all expenditures in the wage and salary sector.
- Thanks to the advanced evolution of digitalization in companies, there is a wide range of providers of suitable tools - despite the teenage shoes. This allows each company to pick the right software. More information on this can be found further down in this article!
What do you have to be aware of in digital payroll accounting?
Before HR-softwares simplify your work in the personnel department with regard to the electronic payroll accounting, you have to check off a few points. For example, it is important that you coordinate the changeover with the works council. If there is no such council, you must obtain the approval of each employee. This is mainly due to data protection reasons.
You also have to consider that depending on the size of the company, the changeover can take a few weeks. Especially the onboarding of new colleagues can be delayed. Beforehand, you also have to decide whether you are aiming for a cloud solution or if you want to use the possibly existing server infrastructure (on premises).
In addition, good planning is always a prerequisite. Most people will also realize - especially those who still resist digitalization - that the transformation is not wild and brings almost only advantages.
Is a paper statement mandatory?
German law merely states that employees must be informed in writing about how the monthly wages are composed. However, there is no regulation that this has to necessarily be done on paper. Hence, sending the salary statement by mail is also not mandatory.
In principle, you could do the accounting of your employees on a beer coaster or digitally as a PDF. Digital documents can also be secured so that only responsible parties and the respective employees have access to them. Rights and obligations with respect to digital salary accounting can thus be quickly summarized.
Are digital payroll statements secure?
That always depends on the implementation! If you use reputable and tested payroll accounting tools, you will have no problems with security and data protection. On the contrary: In terms of security, you will take a big step forward if you come from paper accounting. Encryption and secured interfaces to other HR-related software make it possible.
Which tools can be used for digital payroll accounting?
Since not one software can handle all tasks in HR, a mix is usually used. Based on this, regular and smooth payroll accounting can take place. Tools from the areas of AccountingHR and Document management come into play.
Accounting softwares
As the name already obviously reveals, this type of tool is software for digital accounting. But not every accounting software automatically also handles payroll accounting. Therefore, you should inspect the features closely. If an accounting software is a perfect fit for your business but does not include digital payroll accounting, supplement it with a second tool - for example, an HR-software.
HR-softwares
Personnel management tools are often seen as all-rounders. However, no software can do everything, as the HR department is too extensive. Accordingly, some HR-softwares take over the personnel management, while others focus on recruiting or onboarding. According to this logic, not every HR tool covers the subject of payroll accounting.
Document management softwares
Finally, there's the paperwork. Personnel files, payroll accounting, marketing materials and many other files - sometimes in a wide variety of formats - quickly accumulate in a company. Document management tools (short DMS) help to make these orderly and digitally accessible in one place. You can also assign rights so that, for example, pay slips can only be viewed by the respective employees, the executive level and the HR department. The GDPR plays a particularly important role here. Good tools will meet this requirement!
Top 5 tools for accounting, HR management and document management
On OMR Reviews you can find numerous tools within the three mentioned categories that you can compare. Rated by other users who use the software themselves daily and can therefore report first-hand.
As a little taste, we have created a top 5 tool list for you - a mix from the three categories of accounting, HR and document management.
- sevdesk: One of the leading Accounting softwares for self-employed, Freelancers and small companies.
- DATEV: An accounting software for small and medium-sized companies.
- Microsoft OneDrive for Business: A competent solution to gather all documents of a company in one place - including payroll.
- Personio: One of the most popular personnel software for medium-sized companies on OMR Reviews, which can also deal with payroll accounting.
- Factorial: The trendy Spanish solution for HR departments.
Conclusion on digital payroll accounting
That it is worth digitalizing payroll accounting, is probably clear to most who deal with it monthly. However, many traditionally shy away from implementation. Hopefully, we were able to make it clear that the time spent initially is well invested in establishing a digital infrastructure not only for wage issues, but also for all other HR matters.
After all, most paper and time is involuntarily put into everyday workflows in the personnel department. And in our opinion, the advantages of digital payroll accounting far outweigh the disadvantages.
Invest time once to find the right tool on OMR Reviews, install it in the company and in return get more opportunities to be there for the employees - simply because you will have more time that you will no longer be wasting on analog to-dos.
You should also make more time available for recruitment in times of the war of talents. Just because the game rules have changed towards social media, a digital foundation in the HR area makes sense.
Author
Nils Martens
Nils ist Gründer der Personal Branding Rebels und seit Jahren fester Bestandteil des LinkedIn-Games. Mit seinem Team hilft er Menschen und Unternehmen, auf LinkedIn und anderen Plattformen als Personal Brands sichtbar zu werden. Die Rebels unterstützen dabei, Corporate Influencer auszubilden, Personal Brands aufzubauen und bieten Workshops an. Immer mit einem rebellischen Ansatz: Out-of-the-Box-Denken und authentische Sichtbarkeit stehen im Fokus, fernab von starren Algorithmen und Blaupausen.
