It is indeed a challenge for every organization to meet the regulatory requirements in terms of compliance. There are many government related taxes that are levied with regard to the monthly payroll for employees and in turn the organizations. The acts and laws that relate to statutory compliance also witness many changes due to changing governments. It is a mandate that every organization needs to comply with the regulations and frameworks posed by the government. The various taxes that are related to organizations include sales tax, VAT, Income Tax, and Service Tax and so on. The rules and clauses that related to each of these taxes are complex in nature.
Many organizations handle the payroll process in-house. At the same time some businesses outsource their payroll process to a service provider who handles all the aspects related to this. In both the cases it is very vital to understand the compliance related aspects and micro-manage them to prevent any issues in payroll, since this is related to the operational cost of the organization and any errors will directly impact on the ROI as well as, since these compliance related aspects are related to the government, it might even result in adverse effects in the reputation.
When your organization handled statutory compliance related activities, the factors that tend to influence and create errors include:
Time Consuming and Cumbersome processes
The first and foremost factor that tends to create an issue with regard to compliance and payroll process is that your HR leader must be an expert in the industry. He must be aware of all the changes that tend to happen in a frequent basis with regard to the government regulations, especially taxes.
Lack of Expertise
HR leader of your organization might not be an expert in the statutory compliance and government related regulations. There are many experts in the industry who can work as your service provider to meet your organization’s statutory needs. Thus it is better to identify the best HR technology service provider and outsource your statutory process and make it error free.
Key Leaders & Their Functional Responsibilities
Yet another factor that is prone to create errors in payroll due to statutory misappropriations is that the key leaders who are responsible for other strategic functions who handle these processes. This is a two-way issue, on one side, these key leaders might not be having the expertise to handle these processes and on the other side, if they involve in such processes, they might be less efficient in their actual role.
Loads of Records
When it comes to statutory processes, there are many documents and registers that need to be maintained. These registers become complex when the employee size of the organization increases. When the numbers increase then there is always chances of errors. This is a general human attitude. A professional service provider will have the capability to handle your process better since they are dedicated to handle only this and are experts in the industry.