By far, payroll is the most vital function of human resource management. From salary calculation and wage information to statutory deductions and taxes, salary payments and reports are made. While an entire payroll may be processed by officers in charge, it can also be handled by an automated system. This article illustrates the differences in the new Single Touch Payroll (STP) when compared with the traditional payroll system.
1. Accuracy
Because it relies on the dynamic nature of the human activity, the manual payroll system is more prone to inconsistencies and errors. It is very important to find the best and accurate payroll management for your organization.
2. Speed
The standard payroll process is lengthy and manually managed by individuals. It requires a lot of coordination, approvals, and deadlines. The individuals hired to manage the payroll should have extensive training and experience in payroll management, statutory laws, and compliance-related matters.
Meanwhile, the STP system is much shorter and uses internet accounting software. It is centralized and collects payment information on a real-time basis. Required by the government, employers have to adhere to guidelines and requirements in STP reporting.
3. Reporting
Pay reports processed manually may not be updated or available real-time because it requires a higher amount of data-entry work and in-depth analysis of information. With STP, data is available on a real-time basis as reports can be generated immediately. This type of payroll system has built-in analytic capabilities hence minimal data-entry work is involved.
4. Cost
The manual payroll process is more affordable than the STP system. However, this process may eventually adapt to the cost of the automated one and may even require more funding. This is because of the additional resources used such as the internet and papers and the long period spent in processing it.
Needless to say, the start-up cost of STP requires a significant amount of money. For one, a business needs to subscribe to a payroll service provider to start using the STP feature. Eventually, this may become a cost-efficient option as automated systems do not require a lot of time, and resources on an ongoing basis.
5. Security & Accessibility
Business-wise, the manual pay system is not ideal, as the process heavily depends on individuals. Backing up information and the availability of people responsible for payroll activity is not easy in the event of a natural calamity. However, payroll equipment such as papers and calculators can be quickly replenished and operations may restart much sooner.
With STP, pay information is recorded electronically and can be accessed by authorized individuals in just a click, giving more time for increased business productivity. But when a natural calamity happens and data security is compromised, replacement of defective laptops and restoration of internet connection are challenging. Another cause of delay in a continuing business is a software that is not cloud-based as procurement of the licenses again could be difficult.
6. Scope
The current payroll standards system cannot easily increase in scale to serve more clients and stakeholders. This is because it is a time-consuming activity that requires a hiring process and training for people involved in payroll management It would need hiring and training individuals.
Meanwhile, the STP system is built and designed to cover a large number of business clients and stakeholders. With minimal human intervention and electronic reporting of pay events, this system is simpler to scale as per the demand.
7. Environment friendly
The very fact that the structure and process of a manual payroll involve a lot of paper trail, it is the less eco-friendly option.
STP, on the other hand, doesn’t only automate the entire payroll process and ensures its accuracy, it also promotes a greener lifestyle among businesses of all sizes. Indeed, the system’s paperless data collection is an eco-friendly strategy that not only saves time and energy for business owners and their employees but it helps the environment as well.
Conclusion
While there are companies that continue to apply the manual payroll system due to its practicality and reasonable costs, the STP system outweighs its benefits. With error-free payroll and real-time accessibility to pay information, employers are now conforming with the new system that is streamlined, faster, and hassle-free.
Moreover, the commitment of automated pay-roll and up-to-date and accurate accounting information for businesses makes this system even more reliable and efficient.
This new legislation may have its few drawbacks but with strict compliance on the set rules, a better future awaits among the government and business sectors.
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