Difference between Manual Payroll System and Computerized Payroll Systems

The manual payroll system is an inexpensive method of performing the payroll process. Manual payroll means that you, or another employee within your company, calculate the payroll each pay period entirely on paper. You will need to calculate all earning heads and statutory applicable deductions (i.e. ESI, PF, Income Tax etc.) with no start-up costs. The disadvantage is that whatever you save on start-up costs will probably be eaten up by the amount of time it takes to process payroll. In addition, it’s very easy to make mistakes when processing payroll manually, and the penalty for mistakes, especially mistakes in calculating statutory and can be very costly.

The computerized Payroll System, many companies offer computer software that will assist you in processing payroll. You will need to input information for each employee when he is hired, but after that, the software will calculate payroll taxes and other deductions automatically. Most programs will also process Form-16 forms for each employee at year-end, which can be a real time-saver. The advantages of this type of payroll system are numerous: Fewer potential mistakes and less time spent processing payroll. In addition, employees can be trained to run the program more easily, so you won't need to depend on just one person to process payroll.

Some Payroll Solutions are integrated with attendance machine and the calculation part of attendance is taken care by this automated process, eliminating mistakes and transparency across organization. Also many solutions have open system where any changes in tax computation or adding of new earning/deductions head can be created by end user’s. so comparing manual payroll system versus computerized payroll system, It is simply not comparable. A manual payroll system means doing everything by hand, while a computerized one will enable its users to store data in centralized server and years of data, keeping track of everything. While with a manual payroll system you'd have to keep track of all employees' time by hand, with a payroll software you can automatically transfer all punches or swipes directly into the system, which will store them instantly. It can even separate regular work hours from overtime, and calculate the different remunerations according to set parameters. And if human error sneaks in even with the most organized manual payroll system, a computerized payroll software will provide accurate calculations regardless of the amount of data stored.

In conclusion, compared to computerized payroll software systems, the manual payroll system takes up lot of resource time, resources and money. Stop doing non-productivity activity and start using computerized payroll software solution and work on core productive work where the employee will also be satisfied and motivated.