Any business with more than one staff member requires a system for processing payroll. Paying employees consistently without any delay does not only affect their morale – but it also reflects an organization’s financial stability. Furthermore, it’s a requirement for labor and employment legislation compliance. While payroll processing involves a complex process, acquiring payroll services can help streamline and centralize this crucial HR function.
What is payroll processing?
In essence, processing company payroll refers to the administration of financial records of employees, including wages, deductions, salaries, bonuses, and net pay. The records have to be kept and maintained by organizations as a requirement by local legislation.
In the United Arab Emirates, the common pay period is once every two weeks. Private companies, especially established ones, give payments to all of their employees biweekly. Another common pay period is weekly, which is most common for businesses in the region with hourly workers.
Establishing the payroll period of a company is a fundamental process when it comes to the management of company payroll. A payroll period organizes the process, as well as foster consistency for all employees.
Impact of Proper Processing of Payroll to Businesses
Proper payroll processing, including strict adherence to a payroll schedule, has an impact on a business, which includes the following:
• The morale of employees – an organization that makes late payments makes its employees question the financial integrity of the business. If the employees feel that their job isn’t secure or stable, they are likely to underperform. The most likely result is also a decrease in workforce productivity, as well as the quality of the business. This factor includes their total compensation with benefits and bonuses.
• Elimination of fines and penalties – late payments of wages in the United Arab Emirates result in hefty fines for the business. This includes inaccurate processing of payroll. Hence, it is important for an organization to ensure the right amount is paid to employees.
Regardless of the size and number of employees of the organization, proper payroll management is crucial. For businesses with fewer employees, processing payroll may be manageable. New business owners that are not well-versed with the process may realize the entire procedure is challenging as it involves various legislation requirements that are to be complied with. That being said, most businesses in the region outsource their payroll processing to ensure that they are fully compliant with applicable labor and employment laws.
Outsourcing payroll processing with payroll services is the best solution for small businesses and startups, specifically those who must implement a proper payroll management system as they are growing. Payroll services may cover the basics or include time and attendance tracking. More and more businesses in the UAE have understood the roadblocks payroll services eliminate, which includes fines and penalties by authorities from inaccurate and late paychecks.
Five Reasons to Acquire Payroll Services in UAE
We have already discussed what payroll management or processing is. Now, we will look at the solutions that help in streamlining payroll processing: payroll services. Payroll services that are carried out by a team of payroll specialists will not only ensure compliance with legal requirements. They also simplify the method of paying employees. The following are the main reasons why you should hire experts in taking care of your business’ payroll process:
• Compliance – experts can help ease an organization’s compliance worries. Having to be up-to-date with all legislative updates is near impossible with the busy schedule of entrepreneurs. However, it is but a crucial part of payroll processing. A business owner can’t let anything that is relevant to compliance slip as that brings forth the risk of facing severe fines and penalties. With a dedicated team for your company’s payroll, you will rest assured knowing that you are always processing payroll on time and accurately while being fully compliant.
• Generation of reports – payroll services with reporting can help you in better understanding your organization, as well as your employees. As all crucial information of your staff is maintained and kept by the payroll team, you will be able to keep track of every detail. As experts can general payroll reports which are insightful, you will be equipped in making informed decisions regarding employee compensation. A good example of this is data on employee turnover. The data will reveal issues such as low employee engagement, which you can remedy before the problem gets out of hand.
• Optimization of payroll processes – repetitive tasks related to payroll can be mundane for most employees, which results in human errors. Experts in payroll processing mitigate the issue and make sure that payroll information is all accurate. More importantly, crucial data are protected, which means there is no risk in payroll data loss. With a reputable firm for payroll processing, business owners even get a graph on financial data which helps in forecasting payroll expenses, including potential salary increase calculations. An expert team can help you determine how payroll expenses impact the financial status of the company to make adjustments, as necessary.
• Reduction of errors – the processing of payroll in-house isn’t only time-consuming, but it’s also prone to mistakes as mentioned earlier. Take note: payroll processing involves taking into account vacation leave, overtime pay, benefits, and salary structures. this makes payroll processing very complicated. More importantly, fixing mistakes is time-consuming, stressful, and incredibly costly. By trusting exports with the task, errors are prevented before they cause problems. You will avoid displeasing employees and authorities when employees report errors in paychecks. You will save costs since penalties and fines for errors in company payroll are often more costly compared to hiring a dedicated team of specialists for the task.
• Saving valuable resources – companies spend too much time each pay period in processing payroll. Not surprisingly, the majority of business owners say it’s the worst aspect of running a business. From leave requests and employee claims to overtime submissions, tasks related to payroll pile up very quickly. The repetitive duties are most certainly inefficient use of valuable company resources including time. Outsource payroll processing so you can better focus on growing and strategizing for your business.
If you wish to know more about payroll services in UAE, consult with a team of payroll specialists from payrollmiddleeast.com.