Switching from a manual to a digital payroll is a big step for any startup or small- to medium-sized enterprise (SME) in the Philippines. To ensure that this will not negatively impact business operations or employee morale, it’s a must to iron out the details of the transition process early on. This means carefully planning how to transfer data from one platform to another while minimizing or even eliminating potential causes of discrepancies. At the same time, proper training must be provided to employees and payroll staff so that they can adapt to the digital system and maximize its functionalities. It’s also a well-known fact that procuring systems requires an initial investment. As such, businesses in the country must be prepared to cover the cost of the digital payroll platform that they want to use.
The long-term benefits of a digital payroll management system, however, far outweigh its costs. Below are some of the advantages that local businesses stand to gain by modernizing their payroll systems.
Time and Cost Savings
A digital payroll system allows businesses to streamline their process for the disbursement of salary, resulting in significant time and cost savings. By prioritizing the procurement of an automated payroll system that is capable of calculating tax withholdings and generating payslips, small businesses in the Philippines can reduce their need for manual data entry and repetitive administrative tasks. Eliminating paper-based processes also presents businesses with an opportunity to save on printing and storage costs. Moreover, digital payroll systems facilitate faster payroll processing, ensuring employees receive their wages promptly.
There are also digital solutions offered by innovative fintech companies like Maya that go above and beyond distributing salaries when it comes to helping businesses manage their expenses. On top of managing payroll, Maya Disbursements enables businesses to send allowances and incentives in a snap. These features can be quite useful for BPOs and other companies that typically offer rewards to boost productivity and staff morale. With a dedicated system to manage these time-consuming but essential activities, businesses can free up resources in the long run and redirect their efforts to strategic initiatives and core aspects of their operations. This, in turn, can give companies the means to pursue overall organizational growth.
Improved Accuracy and Compliance
Digital payroll systems facilitate the automation of calculations and tax withholdings, thereby allowing local establishments to ensure precise and error-free salary processing. Meanwhile, choosing a payroll system with built-in and up-to-date tax rates and regulations enhances accuracy and compliance with regulatory bodies. To maximize these benefits afforded by their payroll system, Philippines businesses should regularly update the software solution they have chosen to adopt. This way, they can expect the tool to reflect any changes in tax legislation and they can immediately apply those changes to their processes. By ensuring accurate tax calculations and compliance, companies can avoid potential penalties and legal issues, fostering a positive reputation and trust among employees and other stakeholders.
Access to Employee Self-Service Portals
Some digital payroll systems typically provide employees with self-service portals, empowering them to access their pay stubs, tax information, and personal details whenever they need. Employees can update their personal information, review pay history, and even make changes to their tax withholdings through these portals. This not only empowers the workforce but also reduces the administrative burden on HR and payroll staff, improving overall efficiency and employee satisfaction.
Attendance Tracking and Timekeeping
Integrating digital payroll systems with timekeeping tools enables businesses to automate attendance tracking and accurately calculate work hours. This streamlines payroll processing and eliminates the need for manual timekeeping records. Companies can make use of this capability by choosing compatible timekeeping software and ensuring that their employees adhere to timekeeping protocols. By having precise attendance data, local businesses can improve payroll accuracy and efficiently manage leave policies, leading to fair and transparent HR practices.
Scalability for Business Growth
Scalable payroll solutions provide flexibility and efficiency, supporting business growth without the need for significant system changes or disruptions. The good news is that even a simple payroll system such as Maya Disbursements can be scaled to handle the changing needs of growing companies with expanding workforces. Fast-growing businesses like logistics providers, direct-selling companies, and manpower agencies can use this portal to manage their dynamic list of riders, sales agents, and pool of workers. This digital platform presents a simple interface where businesses can immediately add members to their payroll and accommodate changes in salary structures, deductions, and benefits as the organization grows. This capability can be quite useful to businesses with plans for future expansion.
Enhanced Data Security
It’s a must for small and medium enterprises in the Philippines to prioritize data protection and security. A small to midsize operation is no assurance that a business will not fall victim to financial crime. In fact, according to security experts, 43% of all data breach victims are small businesses, and 60% of businesses that have been breached close within 6 months of the incident.
When choosing a Philippine payroll system, then, businesses must look for an option that offers advanced data security features. It’s necessary to scrutinize payroll systems for their capacity to safeguard sensitive payroll information from unauthorized access or data breaches. Among the features that indicate this capability are encrypted data storage and secure access controls to protect employee data. At the same time, businesses must make use of complementary security measures such as two-factor authentication and post-query analysis, both of which are included in Maya Business’s list of security features. These will help ensure that only fully authenticated payroll transactions can be realized through the payroll solution. By safeguarding sensitive operational and employee information, companies can build trust among their workforce and maintain compliance with data protection regulations.
Businesses in the Philippines should make a priority of upgrading their manual payroll system to a digital one so that they can significantly enhance efficiency, accuracy, and compliance. By prioritizing this transition, local establishments can unlock a powerful tool for operational excellence, enabling them to focus on strategic initiatives and foster a productive and satisfied workforce.