How Technology Has Changed Payroll Management: Then and Now

Payroll Management

How Technology Has Changed Payroll Management: Then and Now

Many of today’s business owners take payroll management technology for granted, with no idea how much payroll has changed in just the last 25 years or so. Once upon a time, “automated payroll” meant a payroll clerk sat at a specific computer with DOS-based software installed, and it could still take weeks between the time an employee turned in a time sheet and received a paycheck. Here’s a look back at those not-so-good old days of automated payroll technology compared to the efficiency we enjoy today, and a quick peek at what lies ahead.

Managing Payroll Before the Internet

When desktop computers began to be used in the 1980s, the introduction of automated payroll no doubt came as a huge relief to clerks and accountants who were used to processing everything manually. But even then, by today’s standards, payroll processing was painfully slow. Although software of the day helped speed things up somewhat, the process still involved a lot of data entry, a lot of paper print-outs, and a lot of waiting.

Payroll managers could only do their work on computers that had the right software installed, and once the data was entered, it was uploaded via modem to the payroll company for processing. Paychecks were then cut and sent, along with a paper payroll report, to the company, where the checks were signed by hand before being distributed to employees on their designated payday. Virtually everyone involved in the payroll process had to plan his or her lives around a weekly or biweekly payroll cycle.

The Payroll Industry Today

The advent of the web has drastically altered the way payroll is handled. Today, cloud-based payroll software can be accessed from almost any device with an Internet connection, which means data entry can be done from anywhere. This gives payroll professionals a lot more flexibility and versatility, including the option to work from home.

Cloud technology and the Internet also makes data transmission almost instantaneous. An employee can submit his timesheet from an office in Florida and have it approved by a manager in Philadelphia and entered for processing at a payroll company in New Jersey within a matter of minutes.

Another big change brought about by web-based technology is the virtual elimination of paper. While some employees still have a need for paper checks, many receive their pay via electronic transfer directly to their bank accounts. One option being tried to further eliminate the need for paper checks is payroll cards, which are essentially debit cards issued to employees that connect to an account that holds their pay.

What the Future Holds for Payroll Management

As much as the payroll industry has already changed with the introduction of cloud-based software, more change is expected to come as software developers experiment with ways to take full advantage of the cloud. Improvements are expected in workflow and automation as systems are upgraded to handle more detailed tasks. More interactive technology is also expected to bring more managers and employees into the process, giving them an active role in payroll management rather than limiting the entire process to payroll and HR personnel. While the full impact of the future of payroll technology on the industry remains to be seen, one thing is certain – change is likely to remain a constant for the foreseeable future.

SourceOne Partners has over 50 years combined experience in the payroll industry and can help you find a payroll solution that fits your specific needs. With offices in South Florida and New Jersey, we can help you better manage your payroll services, employee benefits, human resources and company taxes so that you can save time, money and avoid the penalties of non-compliance. Please call 561-674-0748 to speak with a payroll expert or click here to contact us online.