Payroll Management | AICTE approved MBA college in Bangalore

Payroll is an important document that is used by organizations and companies to perform day-to-day staff management activities. It is a document that contains a list of all the employees of a company who receive remuneration for work carried out or services offered to that company. It provides a summary of the entire money paid to staff by a company within a specific time. A payroll provides the following functions.

• It contains a company’s remuneration strategy, which may include bonuses, leaves, and deductions.
• It provides a detailed payslip, which can be used for various uses. It also provides a detailed breakdown of salary or wage.
• It is used for paying salaries or wages.
• It is used to collate payroll-related inputs.
• It is used to determine actual remuneration.

For effective management of financial activities, a company of more than a staff must possess a comprehensive payroll. The primary function of payroll is to assist a company in the timely payment of staff wages and salaries. It also helps with other essential activities, such as income tax, unemployment tax, and social security. In most cases, having a payroll is mandated by the state in which a company operates. Certain jurisdictions require that the company must keep payrolls within a specific timeframe. 

Payroll management is the administration and management of staff financial reports, such as wages, salaries, deductions, bonuses, and other relevant financial records. It also involves a continuous review and update of the payroll database to ensure that the status quo is always captured with respect to the remuneration of staff.

Maintaining a payroll by a company is extremely important for day-to-day activities and also for adherence to jurisdictional requirements. In most cases, companies maintain a payroll database via payroll application software that is usually semi-automated and easy to use. The importance of payroll, owning, and managing payroll, is highlighted below.

Payroll Management Process

The payroll management process is what a company does in the process of administering and implementing payroll functions. In this process, the business uses software applications to record employee details and manage salaries, track hours, manage to leave, bonuses, and deductions among other functions of payroll management. The process also includes complying with legal requirements related to employee payments, including income tax.

The payroll management process also includes putting in place a mechanism and system to redress employee grievances. The payroll process is integral to companies establishing integrity and financial stability. Where there is poor payroll management, organizations open themselves to potential fraud.