Advantages and disadvantages of a manual vs computerized payroll system

What are the advantages and disadvantages of a manual payroll system vs a computerized payroll system?  Will a manual payroll be acceptable for your company or do you have to switch to a computerized payroll system?

During the course of the development of the Philippine Payroll Software we have always asked the same question, “how can our computerized payroll system be beneficial to companies?”  We know that some prefersmanual system and others are just afraid to make the shift.  Here are some key advantages and disadvantages of both.

Advantages of a Manual Payroll System

  • Relatively cheaper since you only need to use either the old fashioned books or use programs like Excel.
  • Using Excel in computing your payroll is not considered as a computerized payroll system but it is more effective than pure manual.  By using this you only need a standard computer.
  • Can readily start payroll processing.

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Disadvantages of a Manual Payroll System

  • Becomes more difficult as the number of employees grows.
  • More tedious to prepare.
  • Does not allow real time reporting and analytics.
  • Human error can be a major inconvenience since an individual carries out all timesheets, taxes, wages and other processes.
  • Errors can be harder to track and might result in various business penalties.
  • Errors can also cause employees to be underpaid or salaries to be delayed this can really create employee dissatisfaction.

Advantages of a Computerized Payroll System

  • Avoids most common human errors by implementing a system which requires present data and automatic calculations.
  • Payroll computation tends to be more accurate.
  • Payroll can be done on a timely basis.
  • Number of employees being processed will no longer be a problem.
  • It is easier to maintain.
  • It is easier to track and correct errors.

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Disadvantages of a Computerized Payroll System

  • Generally more expensive compared to manual payroll systems.
  • Needs standard computer setup in order to operate it well with certain prerequisites.
  • Needs an initial training for those who will maintain the payroll system.

In summary, going for a computerized payroll system would be more economical in terms of future savings.  These savings includes both time and money because of accurate computation vs mistakes in manual accounting.

Philippine Payroll Software would be very happy to help you assess your current payroll system and even decide if you want to upgrade to a computerized system.  Schedule a demo now or send in your further queries by contacting us or calling +63(2) 535-7333 or +63(2) 709-9881.

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