The Pros and Cons of an Open-Source Payroll Software
Blue-collar workers are traditionally paid on an hourly basis. The wage bracket depends on their skill sets and the amount of work done. It is compliant with the minimum compensation rate of different Indian states where they perform manual labour. But planning and managing the payroll for a largely distributed workforce is a challenge.
Underpayment or non-compliance may cause fraudulent activities and labour strikes. It is because most of them live ‘hand to mouth’ and are highly dependent on their salaries to fulfil day-to-day needs. For instance, millions of workers started a nationwide two-day strike in March 2022 asking the government for a minimum wage hike among other demands.
The good news is that robust open-source payroll software can help you practise a fair pay policy. It offers unified workforce management with updated and accurate data. This saves time and effort by storing all information in one place. You can protect yourself against hefty fines and lawsuits too with a well-compliant system. Read about other pros and cons of integrating automated HR payroll software.
Pros of a Payroll Management System
The global HR payroll software market will reach about $15.37 billion with an 11.2% CAGR by 2030. This is because they are tailored to your business size, location and goals and simplifies employee payment procedure. Another of the top advantages of open-source payroll software is that it leverages AI for wage processing and administration. It eliminates the need for a payroll administrator and subsequently manual calculations which are time-consuming and error-prone. Other open-source payroll software benefits are:
- Great transparency for staffing vendors and clients without data leaks.
- Complies with state and central government guidelines: the software lowers the burden of PF, ESI, PT, LWF, TDS and minimum wage compliances.
- Offers complete visibility into salary with an employee self-service portal.
- Accurately identifies any blue-collar worker with missing payroll inputs.
- Sends the required tax exemption during tax calculations.
- Offers a flexible salary structure: CTC or gross salary.
- Helps set up daily or monthly salary structure template.
- Let you add as many pre-defined salary components for personalisation.
- Easily accommodates performance-based incentives.
The open-source payroll system can map a salary template to an employee based on their vendor, region, and job profile. The breakdowns are professional looking with detailed breakdowns for better understanding and minimum confusion. The entire process is quick and takes bonuses and local holidays into account as well. You do not have to know the complex tax legislation since the software does it for you. Simply book a demo first to make an informed choice.
Cons of a Payroll Management System
A payroll software, like any other IT system, may face cybersecurity issues. This is why it is critical to work with an open-source payroll that promises a secure cloud-native system. It must include strong encryptions, firewalls and private clouds. This can reduce third-party access to confidential information about your business. Other basic problems include rare technical glitches which can be fixed easily. Keep backing all critical data at regular intervals so you do not lose them in cases of mishaps.
The countless advantages of open-source payroll software overshadow the risks. They are highly scalable, cost-effective, and interactive. They make calculations way too simple and generate invoices and payslips too. Rest assured that technology will ease the workload of HRs so they can work on tasks that machines cannot do. Intuitive UI and dedicated support offer an excellent customer experience. This way managing your frontline workers becomes quite effortless which ultimate proves beneficial for your revenue and reputation. You may also see low attrition rates and high employee satisfaction with a digitised platform.
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