5 Must-Have Features In Your Payroll Management System
November 22, 2022
By Ganesh Ram
Pay accounts for more than half of a company’s business spending. Yet, it is rarely in focus. According to the 2021 Global Payroll Complexity Index, 40% of companies still use spreadsheets, and 18% continue to use high-risk and largely non-compliant manual and paper-based activities as part of their payroll processing.
Manual payroll processing not only results in errors but also causes a lack of a single version of the truth, thus having a cascading effect on several personnel decisions.
For companies, manual payroll processes also often add to a huge amount of company spending. According to Ernst & Young, performing a single manual entry of HR data without using self-service HCM technology costs $4.70 for a company.
Here is where automated cloud payroll software can help solve this by minimizing human error and increasing employee satisfaction. They also eliminate fines and penalties incurred due to manual errors.
However, not all payroll software are created equal.
Here are some essential features you need to look at when selecting a payroll software in Indonesia:
1. Employee Self-Service
Employee Self-Service (ESS) facilities such as chatbots make it possible to resolve employee queries more efficiently and satisfactorily, reducing TAT.
While it is impossible to have HR personnel log in to the payroll system 24/7, a chatbot can help your employees round-the-clock in case of queries. Besides giving employees more control in managing their benefits and salary, employee self-service systems also save time for HR administrators.
Such a system also improves data accuracy as employees can input and update their information, including bank details, statutory data points, investments etc.
An employee self-service portal can also help eliminate information overload by creating a single, readily accessible source for all company information, such as various policies and handbooks, to avoid confusion.
2. In-system Approval & Ring Fence with Audit Trail
Ideally, no person or department should completely control the payroll workflow. This prevents users from making unintentional errors or deliberate actions affecting user data.
The right payroll software must have embedded checks and balances to prevent this. This can be achieved using the principle of maker and checker, which means for each data collated or configuration change, at least two individuals should be required to complete it.
For instance, if the maker creates the input, the checker is needed to approve it. This mechanism allows different people to be given maker and checker duties in pre- and post-payroll activities.
Such a system helps improve accuracy, reduce payroll cycle time, and provide better system software and data control.
In the case of Payroll, the data is processed by the maker, but the checker authorizes it before getting the salary disbursed. This system enables different people to be involved in various stages of payroll processing, ensuring there is no bias and proper checks are exercised.
Configuration tools allow you to do more with your payroll software.
Instead of burdening your team, configuration tools allow them to easily modify workflows and parameters for quick onboarding and seamless migration.
When it comes to payroll management, even if the system becomes obsolete over time, customization allows users to efficiently carry out their regular payout activities, such as creating reports, configuring product heads and cycles, changing the calculation rules, etc.
Ideally your payroll management system should be easy to customize as per your company’s requirements. Admins should also be able to customize different facets of a payroll system for employees at different functions.
4. PDP (Personal Data Protection Bill) Compliance
In addition to offering data security, the ideal payroll software contains personally identifiable information (PII) of all employees and thus should be protected by data privacy laws.
For example, you can make your payroll software password-protected for each employee and give them exclusive access to their data.
Modern payroll management software lets you securely store sensitive employee documents and payroll reports to ensure personal data security.
In Indonesia, it is also recommended that payroll softwares adhere to the recently launched PDPA Act.
In a country as complex as Indonesia, payroll softwares need to consider local legislation and rules carefully. The law also mandates that payroll data needs to be stored by the payroll program for a period of 5 years.
There is a need to adhere to Indonesia-specific requirements such as –
Payroll softwares in Indonesia should also enable employers to deduct insurance from the monthly earnings of their employees and remit it to social insurance authorities on the latter’s behalf.
While not mandatory, it is highly recommended that companies make payroll payments to employees and authorities from a bank account located within Indonesia.
The Bottom Line
Given the changing technological landscape and demands of employees, payroll is set to change in the coming few years.
An advanced payroll system is necessary for any organization in Indonesia that plans to invest in employee experience and productivity. However, besides focusing on the technology aspect, the usability and flexibility of the platform need to be considered.
The robust platform will help you create a smarter workplace through intelligent payroll management. If you are looking to upgrade your payroll process or grappling with building enhanced transparency around a distributed workforce and operations, PeopleStrong Payroll could be the solution you’re looking for.
Find out more about PeopleStrong’s next-generation Payroll