Even though most businesses round the globe are shifting over to the use of payroll accounting software either independently or bundled along with the Hr software, there are many who are still debating the same. These people are perhaps not aware of the hazards that one would eventually have to face if the payroll accounting system is not digitised.

Some of the common problems that frequently occur to people still following a manual payroll accounting system are:

• Tax penalties: Humans are prone to errors and statistically speaking companies incur a huge loss by erroneously reporting for taxes. In fact it has been seen that about 40% of small businesses where the use of the manual system is rampant, have to pay heavy tax penalties.
• Payroll errors: Payroll accounting involves a number of fields which need to be simultaneously kept updated on a daily basis. This task might seem simple but given the amount of minute information that one needs to keep a track of for each employee, errors become quite common.
• Information loss: It is also very difficult to maintain paper based systems. They are not only perishable but can be easily tampered with or lost because of natural disasters. These situations are extremely detrimental for the company concerned.
• Misclassification of employees: In case of a manual payroll system it is very easy to make a mistake and overlap entries. This results in the misclassification of payable hours for the employee resulting in dissatisfaction or even a lawsuit.
• Time theft: This is perhaps the greatest disadvantage of using a manual based system. What the Payroll software is able to achieve within minutes takes hours or even days for an employee to manually achieve. This results in both financial and manpower loss.

With so many proven demerits of manual payroll accounting, shifting over to the digitised payroll accounting software is definitely viable both logically and financially.