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Why to Automate Your Payroll Management System and Its Benefits

May 5, 2023

Payroll can get confusing sometimes for the HR and Finance teams at a big company with lots of employees working from multiple locations.

Organizations need to ensure that every data input, like taxes, bills and invoices, complies with existing laws and regulations. But, with laws and compliance rules changing from time to time, the processes involved often get complicated and challenging. Add the complexities of handling the payroll of a globally distributed workforce to the list, and the challenges intensify even more.

A manual approach to payroll is not just cumbersome, but also poses the biggest threat of human error. Calculating pay requires a mountain of paperwork where the data must be duplicated and passed around several departments. This simple daily task not only involves a lot of time and energy but also increases the likelihood of making errors. The issue of security is also most critical here as payroll involves critical information, which becomes a challenge if outsourced to third party service providers. That is why 67% of medium and big-size corporations have already automated their payroll.

An efficient payroll workflow in place can ensure that all payroll operations are being managed smoothly and without errors, thereby eliminating all risks related to payroll processing.

Why is this a serious problem?

Employee compliance risk

In the case of manual payroll processing extra attention needs to be paid to make important legislative updates. Faltering on abiding by any of the statutory laws can make corporations face severe fines or penalties for non compliance. In 2021 the IRS collected over $6 billion in fines paid by employers because of payroll mistakes. Several statutory compliances such as minimum wages, TDS deduction, ESI finds, PF deduction, gratuity, EDLI and more need to be adhered to every month. Staying up-to-date on all the rules and regulations is critical, but extremely error-prone if done manually.

Rising number of cross-border employees

International hiring among businesses are skyrocketing with corporations primarily looking to expand their business into new markets and/or increase their market share in other countries. Hiring and paying international employees involves a complex series of requirements, such as adhering to local regulations, managing taxes and dealing with fluctuating exchange rates. In fact, 80% of firms hit roadblocks when making international workforce payments, as per a PYMNTS survey.


Sancode technologies can replace the manual effort involved in payroll's repetitive tasks with bots and dramatically enhance the entire process.

RPA solutions can automate all repetitive and human-associated payroll procedures such as data collection, data entry, data validation, payroll calculations, defining policies, calculating deductions, filing returns, and so on.

Payroll processing being a complex process, comprises large quantities of documents, involving multiple form submissions and data entries that contain employee details. OCR technology can extract employee details from those documents and improve processing time. Automated payroll systems can also help in generating reports such as productivity graph, PNL statements, etc. that can improve and enhance company operations and also ensure all records are maintained in an organized way to ensure compliance and make tax filing easier.