Economy and speed: the (not-so-secret) ingredients of the digital payroll

Of all the obligations in the world of work, "generating payroll" is king.

If, as a human resources manager or CFO, you are looking for a magic formula to carry out this process correctly and expeditiously, you've come to the right place! Everything you need to know can be summed up in two magic words: electronic payroll.

🪄 Going from a paper payroll to the implementation of a digital payroll brings you advantages as if by magic! We present them to you in this article along with the "secret potion" to obtain them.

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What is electronic payroll?

The payroll is a document that supports the payment of salaries, perceptions and retentions of the employees. The general structure of the payroll or payroll format must include the following minimum legal information:

• Gross salary,
• net salary,
• Social Security contributions,
• paid vacations,
• withholdings,
• overtime, etc.

Payroll, commonly generated and stored physically, can now also be documented digitally.

This means that the electronic payroll is the digital equivalent of the record of payments or credits that is filed in a physical space. Therefore, it has the same validity as the physical payroll.

The electronic payroll, on the other hand, is the digital equivalent of the record that is filed in a physical space, which has the same validity as the payroll. This is prepared monthly and must include the minimum legal information:

• Gross salary,
• net salary,
• social security contributions,
• paid vacations,
• deductions,
• overtime, etc.

Why is electronic payroll important?

Implementing electronic payroll in your company offers a series of immediate benefits such as:

• Accessing automatic updates, thanks to constant scheduling and monitoring.
• Having greater mobility in terms of the information available in the cloud, which can be consulted from computers, tablets, smartphones.
• The possibility of integrating electronic payroll with other business processes such as electronic signature and invoicing.
• Ensuring data protection.

This, in addition, translates into the specific advantages detailed below.

1. Process automation

Forget about doing your payroll in Excel! When you opt for digital payroll and rely on specialized software, you can automate processes, focus on strategic tasks and save time. The software performs for you tasks such as:

• Payroll editing,
• sending of payment receipts,
• counting paid leave, etc.

The digital payroll is easy to transmit for administrative or legal purposes, as it is digitally generated and signed.

2. Economy and scalability

Forced to generate payroll for the entire workforce, employers can see significant time and cost savings by opting for an option that facilitates the automation of processes and avoids spending on paperwork and IT equipment.

When the company relies on an IT solution such as online software, for example, it can adapt it to its needs. Even if later on it needs to make changes as the structure of the company evolves, it can make the payments according to the functions required by the business.

3. Reduction of errors

Digitizing payroll also reduces the risk of errors due to manual data entry by automating this task. Entrust your tasks to an online payroll solution and spend less time correcting errors or resolving disputes.

4. Transparency for the team

Electronic payroll tools increasingly integrate collaborative work. In the case of payroll software, employees can access their payslips, consult their leave, vacation balances, overtime, etc.

In addition, you can set access rights to different modules or functions, according to the user's profile. The HR department has access to the entire solution, while for the employees⋅as access permissions are set.

5. Regulatory compliance

E-payroll solutions take into account the legal obligations in this area. In addition, many of them offer tax management, including the different applicable taxes.

6. Ability to generate analysis and reports

Because all data is digitized and stored in one place, the information can be exported to generate customized and synthesized reports. With the data extracted from each employee⋅a digital payroll, optimal tracking of trends and indicators can be carried out.

7. Interoperability

As mentioned earlier, electronic payroll solutions or platforms are usually very complete. Therefore, they have the advantage of having HRIS functionalities that allow you to integrate expense reports, leave reports, absence reports and overtime management into your payroll tool.

How do you automate payroll?

Nowadays, automating employee payroll is quite simple and practical, thanks to technological advances. Remember the "secret potion" we told you about at the beginning of this article? You are about to find out what it is all about.

1. Choosing payroll management software

There are many options on the market, which adapt to the needs of your organization, whether it is a private company or public administration.

There are even solutions such as Grupo Castilla that handle both. That is to say, its payroll software not only takes care of accounting integration, cost centers, special regimes or retirement pensions, but also payroll and job listings, public employment offers and file management (SEPE and RED systems).

2. Customize the payroll

Depending on your company's requirements, you may be interested in adding the following additional information to the elements that make up a payroll:

• Company logo and image,
• contractual particularities and existing positions,
• sector/type of company (collective agreement),
• bank reconciliation,
• overtime payment,
• professional category and contribution group,
• integrations with other systems: accounting, time and attendance, etc.

3. Include legal obligations

If you have a solution for digital payroll generation, this aspect is covered. However, do not forget to take care to include the information related to:

• Company and employee⋅a data,
• Payroll period,
• contributions and taxes,
• accruals.

4. Schedule the payroll

This includes scheduling the payment of salaries and the subsequent sending of the payroll via e-mail. It can also remain available to the employee⋅a, in your payroll platform that you have contracted.

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To sum up...

• The payroll is a document that compiles the support of costs and deductions that a natural person receives at the end of an established period, product of the labor relationship that he/she has with his/her employer company.
• The electronic document equivalent to the physical payroll is known as digital payroll and has the same validity.
• The advantages that electronic payroll offers to companies include:
  • The automation and interoperability of processes,
  • cost and time savings,
  • legislative compliance,
  • optimization of workflows.
• Part of the process of moving from paper to digital payroll lies in implementing a payroll software or platform.
• The right choice of a payroll software depends on several elements such as:
  • The size of your company,
  • the sector of activity,
  • the available budget.