Blog: 9 Ways Robotic Process Automation Is Changing the Future of Payroll

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Robotic Process Automation in Payroll

If you work in the payroll accounting department, a robot wants that job. There is a major disruptive trend of robotic process automation (RPA), which is being applied to routine, repetitive tasks performed by humans. Many think of manufacturing processes as the obvious place to deploy robotics. However, RPA in payroll processing is just as effective in replacing human effort in many repetitive accounting functions, such as payroll processing.

A payroll pay cycle is an event that is defined by calendar dates and rules. The input needed includes the data about human beings to pay, the tax calculation information, and a mechanism to verify the hours worked for workers paid on an hourly basis.

RPA in HR and payroll processing are new innovations; however, the adoption of RPA for payroll processing is moving forward rapidly. The Institute for Robotic Process Automation reports that RPA already has an impact on about 40% of back-office administrative functions for enterprises.

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Benefits RPA in payroll processing

Here are some major benefits RPA in payroll processing creates for many organizations:

1. Improve Process Efficiency

RPA is far less susceptible to errors that human beings make while doing the same work. RPA processes payroll functions according to the rules. The only vulnerable area for introducing errors is if the rules are not entered properly and not updated when the rules change. If the rules are accurate and updated as necessary, a payroll processed by an RPA system may approach 99.99% accuracy, which is far superior to human efforts.

2. Lower Payroll Costs

Executive management sees payroll processing as a necessary function since they need to be paid by the system as well. However, the payroll process does not contribute added value to the business. Therefore, payroll departments are usually working on low budgets to keep the cost of payroll processing to the minimum.

One solution many businesses employ is outsourcing the payroll function to a service. If the outsourcing company uses human beings to do payroll processing, there are still significant opportunities for human errors. Moreover, there is a security risk for the exposure of confidential payroll data to a third party.

The current best practices are to use an RPA system for payroll processing. This improves process efficiency, keeps confidential information in-house, and lowers costs at the same time.

3. Machine Learning Using Artificial Intelligence

An RPA system does more than simply process the payroll. It becomes possible to analyze the data and uncover useful insights to help maximize workforce resources. Unplanned events, which disrupt the pay cycle, are used as machine learning inputs for artificial intelligence programming. This helps improve responses to similar events in the future.

4. Better Regulatory Compliance

Businesses may operate in different jurisdictions within one country as well as may employ workers in multiple countries. Keeping with regulatory changes that modify payroll processing is a complex endeavor for a human being. An RPA system is rule-based. The parameters of the rules can be adjusted at any time. This makes compliance with regulations far easier to manage than relying on human expertise to follow all the complex regulations and changes.

5. Easy Deployment of an RPA System

Even though an RPA payroll processing solution may handle complex global payroll for multi-national corporations, an RPA system is easy to deploy. There is no need for custom software coding or IT infrastructure changes. The investment in RPA solutions for payroll processing is modest. There are SaaS offerings of these solutions available on cloud networks.

6. Automatic Error Correcting

One thing that has the potential to waste plenty of human work time, is the error correction of data records. RPA excels in automatic error correction that requires no human intervention.

An example of this error correction methodology might occur for a worker at a U.S. location that starts as a new employee. If the new employee data is entered in the system with an address that does not contain the proper zip code, the RPA system automatically checks the address.

The RPA system uses the master list of all known U.S. Postal delivery addresses to find the correct one. It changes any mistake in how the address is formatted and adds the correct zip code to the file.

Cont. Reading…

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Source: Artificial Intelligence on Medium

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