Cashflow is the total amount of money and money equivalents like shares and money market funds transferred into and out of business. Cashflow and its statement are essential for a business. The cash flow statement gives information on operating, investing, and financing cash flow. A company’s flexibility, liquidity, and financial performance depend on it.

Payroll is the list of employees that are used to record and maintain the calculation and distribution of wages and deduction of taxes. It has various components.

Payroll Components

• Employees information
• Hours they worked (the time they take off work for vacation, sickness, and other holidays)
• Salaries and wages
• Overtime pay
• Incentives
• Fringe benefits (like health insurance, education assistance, provident funds, retirement plans, and other employee discounts)
• Tips
• Commission
• Bonus pay
• Payroll taxes
• Garnishments (post-tax deduction for unpaid taxes, dues, and defaulted loans)
• Gross and Net pay

Payroll Issues

Payroll is a complex process that involves several issues. Let us look into the payroll issues and their details.

Ill-timed payment

As employees are under work pressure, they expect on-time payments. Occasionally the above issues can result in ill-timed payments. Holidays and other event popups can disturb the process too.

Overtime pays

According to Section 59 of the Factories Act of 1948, payment for an hour must be twice the regular pay for workers who work more than 48 hours a week. It is a tedious process when the number of laborers is high.

Inefficient time records

Data entry becomes an issue while recording the time of entry and exit. It can cause underpay or overpay to an employee. 

Misclassified workers

Employers may hire workers as contractors, temporary employees, freelancers, and interns. The employer can not treat them as regular employees. One has to use W-2 forms for regular employees and 1099 forms for misclassified employees while doing the auditing process.

Complicated calculations

One should be aware of every law and regulation concerning the payroll process. If the person is mentally disturbed, unwell, or ignorant of the process, it may cause complications in the process of computation.

There are several other issues like processing incorrect information, regulatory changes, etc.,

Payroll Service

To overcome such problems, we have payroll services. It is an external organization that is skilled enough to serve companies concerning payroll management. A payroll service will attain information and money from the company, calculate, and share them using the regulations.

Payroll Solutions

As said, the payroll service providers solve payroll issues.

• Payroll service providers use software and sync time and attendance with the payroll software to avoid ill-timed payments.

• They will study and follow the company’s overtime policies. They will implement them effectively.
• There is web-based time clock software to avoid confusion.
• The use of Time Clock app, wireless time clocks, and some other applications will enable the accuracy of the pay.
• After ensuring the type of employment, they deduct the tax.
• No one can escape the penalty when there is a mistake.
• Payroll service providers will enforce rules and regulations. There will not be a flaw in the application of government laws.

Payroll Service Providers in India

Some leading payroll service providers in India are, 

• ADP Experts
• MME Payroll India
• AKM Global
• Aon Plc
• People Strong
• Minerva
• Easy Source India
• NGA HR
• Brooks Consulting
• Office kit HR 
• Genesis Zeal

Positive cash flow will pay debts, reinvest, return profits to shareholders, finance expenses, and provide a defense against future challenges. As payroll influences cash flow, payroll service becomes inevitable.