Importance of Payroll Software for Small and Medium Enterprises in India

One of the important functions to manage business is handling the human resource processes. And, among the issues one would encounter about human resource function is handling the payroll. Payroll departments are the backbone of any business and managing these processes efficiently is as important a task as conducting other business operations. A manual payroll system is a hectic task; a company with few people can maintain a manual payroll process, however, it is a time consuming task and frustrating to try and run an HR or payroll shop with a mismatched puzzle of spreadsheets and it only gets more complex as your company grows

Payroll administration is a burden to small companies and at the same time a very crucial activity which is repeated every month involving complexities related to calculations, deductions and statutory regulations. While many companies may go with processing the employee payroll side manually, this is not achievable amidst growing business. A robust and cost effective business payroll software is a must to handle payroll processes in order simplify the task and to capitalize on the efficiency in the long run of the business.

Small businesses are often too small to justify the cost of employing their own HR department. In these cases the responsibility of payroll administration can fall on anyone, from the managing director to administrative assistant. While they can go with handling the payroll manually, but this is not just right way and a payroll solution early in the business lifecycle help save both time and money.
Payroll processing is an error prone activity – If organizations have just one or two employees it may seem relatively easy to compute salaries outstanding, taxes etc, but as small business starts adding employees they find spending more and more time in computation of salaries including variable pay. Errors are common in the full and final settlement and increases when employees join in the middle of a term as the processes are manual. Ultimately, businesses may find that without the right program, business can not grow as quickly as planned.

A payroll solution software or program could make small and medium enterprises improve the overall operational efficiency. It helps in Computing salaries including statutory computation of PF and ESI, Reimbursements as per CTC norms, maintaining employee master details and correspondence in respect to letters, emails and documents in an organized manner, Keep track of Employee leave taken and loan availed.

The second reason to consider this type of payroll software is that it makes meeting any tax obligations much simpler. Calculation of Income tax is another routine and pain staking activity that needs to conform to government regulations and norms. A good software package can help to automate this activity for greater efficiency and accuracy.

For a small and medium enterprise, investment in software to automate processes is crucial in terms of cost and benefits. That’s why it is important to choose a solution which is easy to use, customizable to the specific business situations, scalable and robust with tools for making software meet the needs of growing business. Essentially, it should help to streamline the entire process, making the task of processing payroll less time-consuming and error free.

When we take it in Indian scenario regarding software vendors for payroll software, we can find two kinds of vendors. First one is very small companies providing payroll software and second one established big software players.

While deciding on payroll software buying we need to keep in mind:

  1. Compliance with tax rules and regulation
  2. After Sales support
  3. Software upgrade support
  4. Customization as per organizations need

In India we majorly see small vendors in this scenario, who compete mainly on the pricing advantage, but lacks good customer support and software upgrade. Recently Sage India, subsidiary of Sage Group. A leader in payroll and accounting software world wide has come up with Pocket Payroll Software, which offers reasonable pricing and good customer support. You can visit to know more details.