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Manual Payroll

The manual payroll system requires a lot of attention and concentration to avoid error. Manual payroll is the process of computing or calculating the payroll by hand. The manual payroll processing does not require the use of software. Its processing only requires the use of spreadsheets, typewriter, and stationaries.

Pay slips must be created individually for each employee. Many medium-sized to large companies with many employees outsource their payroll accounting to external accountants or have their own payroll accounting departments, which take care of payroll accounting.

You can either create or outsource the pay slips for your employees yourself. The personnel who is in charge must have a deep understanding of payroll laws in order to be able to carry out the computation. If the employee is unfamiliar with these laws well enough, the outcome will be salaries full of errors and non-compliant to tax payroll laws have their consequences.

You do not need any special qualifications to be able to create a pay slip. As an employer, you can either create them yourself or hire one of your employees to create them.

Small and medium-sized companies with few employees usually require a more cost-effective solution. The independent creation of pay slips is therefore often the more sensible solution. Employers should only choose a manual billing system only if they have a few employees. The advantages of the manual payroll system are that it is cost effective to implement.

The manual preparation of pay slips is free. For example, you can easily use Excel. However, you (or one of your employees) have to deal intensively with payroll accounting in order to be able to actually create the pay slips without error.

Please also note that the pay slips must be created individually for each employee. The more employees you have or want to hire in the future, the more time-consuming it will be to compile pay slips.

Problems of choosing to use manual payroll in your company

Choosing to use a manual payroll can be very stressful and challenging as it involves a lot problem for the company.

  • Chances of losing data is high: your employee and company data may suffer corruption due to unauthorized access by some personnel. The use of spreadsheet to process payroll is not secure.
  • Inconsistent payroll processing: processing of payroll data on spreadsheets and files as the personnel processing it will need different documents for employee record, leave, payroll and other important information whereas, an automated payroll will save you the time by storing all your records in a single place and each process will synchronize with the rest of the processes.
  • Data is prone to error: The manual payroll process is easily prone to error. One single erroneous entry could alter the whole outcome of the entire process and tracing to the source of the error is always time consuming and complicated process. if the problem cannot be located, the personnel will need to start the process all over again.
  • Advanced knowledge of payroll accounting is necessary to be able to create the pay slips without errors.
  • Time-consuming because the bills have to be manually created for each employee.

 

– Rinku Mukherjee Bhate is the founder CEO of Career Stroke. She has worked with leading HR organizations in India in the past. She possesses over 24 years of experience offering a vast bouquet of services like executive search, head hunting, corporate training, compensation surveys, employee satisfaction studies, retained search, policy manual services, counseling, etc.