How Excel took place in payroll processing ?
In payroll processing, HR department needs to take care of many tasks such as payroll calculation, reporting and submitting the payslip. Earlier payroll was processed manually. But manual calculation was not feasible as there are high chances of human error. Even a single calculation error in payroll affects the employee’s satisfaction and thus affecting the productivity of the company. As manually processing payroll was not the ultimate solution, companies started processing their payroll in Excel.
Excel’s Assumption vs Reality
Businesses had assumptions that Excel is simple to use, everybody knows to use Excel, easily suits the company requirement, etc. They felt that Excel was the most preferred way for payroll processing.
But the reality is that Excel is becoming tedious to process payroll of employees in large companies. As the company grows, payroll becomes the biggest concern and it’s difficult to manage in Excel.
Some of the issues experienced while payroll processing through Excel:
- All data is required to be entered manually
- As data is entered manually, there are more chances of errors to be generated
- More than one person cannot work simultaneously on the same excel sheet on which all records are maintained for calculation
- If laws related to statutory compliance changes then updation is required in excel sheet
- All the statutory compliance related computation are maintained in different excel sheets so data compilation is difficult and can’t be done in a single day
- As different excel sheets are maintained for various calculation, report generation is cumbersome
- One error while applying the formula and the whole report goes wrong
- Payslips are to be generated and distributed manually
- If virus attacks or system crashes then there is huge loss of data
CNBC published a report stating Spreadsheet errors are costing businesses billions of pounds.
“ F1F9, one of the world’s largest financial modeling and training firm, estimated that 88 percent of all spreadsheets have errors in them, while 50 percent of spreadsheets used by large companies have material defects. The company said the mistakes are not just costly in terms of time and money – but also lead to damaged reputations, lost jobs and disrupted careers”
- JP Morgan, a U.S. based multinational banking and financial services company, lost more than 6 billion dollars due to an error made while copying and pasting data from one spreadsheet to another in Excel.
- Excel error left Barclays with unwanted Lehman Brothers‘ US assets that included the error of 179 contracts.
- Fidelity Magellan Fund, one of the most well-known US-based mutual fund industry, lost billions of dollars when the accountant omitted the minus sign on a net capital loss of $1.3 billion in excel sheet.
To overcome all the above issues or to have an alternate way of payroll processing with a single click, a payroll software is the best solution.
factoHR is one such payroll software which covers all the above aspects of good payroll system. It automates the payroll process and streamlines all the HR operations. It provides reliable support for all your statutory compliance related needs. It helps to eliminate the tiring process of manual intervention.
To know more about factoHR – HR & Payroll software, please contact +91 782 000 3100 or visit www.factohr.com