Leave Information As A Critical Payroll Input

How a leave management system impacts payroll processing?

Long story short, if you plan on setting up a robust payroll process in your organization, you need to have an efficient system of leave management in place.

It’s high time that outmoded (read paper-based/ manual) leave management system be shown the door and automated leave management brought in its place. Here’s why.

Let’s start at the beginning, before the payroll is actually processed. Think about the prerequisites necessary to process a payroll. Leave data is one of them. Without correct information about the number of LOP (loss of pay) leaves availed of by each employee, the accuracy of your payroll goes for a toss. Why do manual systems fail in this respect? For a good number of reasons, the most pertinent among which are cases of missed data and dependence on managers to provide HR with the correct information.

Critical Payroll Input

Seamless flow of this information of into the payroll system too is hindered by systems that do not take advantage of leave management software. Software that is integrated with the payroll system, on the other hand, achieves this with no fuss whatsoever.

An advanced online leave management system also comes packed with a feature commonly termed employee self-service (ESS). This feature offers the employee access to his/ her leave data, among other things. This ensures the capture of accurate and real-time data with minimum hassles, thereby reducing inaccuracies that arise in the leave information that flows into the payroll system.

Collecting leave information poses additional challenges compared to other payroll inputs. These include the fact that leave data:

Flows in through the course of the month/ pay period

Involves interactions between employees, their managers, and HR.

The constant flow of data results in the need for constant updates to the leave information captured. With a manual system in place, what this means is: an HR personnel has to be at it each day, usually collating data from email inboxes and logging it into Excel sheets. This steals away time and calls for constant effort.

Let’s take a quick look at the process that precedes the collection of leave information when a manual system is in place. The employee first places a request for a day off with his/ her manager, which is then approved/ rejected by the latter. If approved, the relevant HR personnel needs to be informed of the same. The HR then enters this data manually into a document.

The above, long-drawn-out process can easily get complicated, and often does, and ultimately affects payroll processing. Two such instances are cases where the leave request is pending at the end of the leave year, and those where a leave that has been granted is not availed of.

Moreover, such a process may result in delays in collation and verification of leave information, which in turn causes delays to payroll processing. While on the subject of manual leave management, let’s not forget that such systems are also highly prone to human error.

Opt for an automated, online leave management system today to ensure accurate and timely payroll processing.

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