Manufacturing Industry

Payroll Challenges in the Manufacturing Industry

Payroll challenges are common in the manufacturing Industry. With most manufacturing Companies shifting towards automation, payroll is a very functional branch which often handles and administers the payroll details of the employers. In some industries, payroll is handled by the human resource department (HR) whilst in others, it is a separate department altogether. The manufacturing industry as a whole usually handles its payroll responsibilities through the employment agencies and they work as extensions of the payroll department. In the majority of the cases, the role of payroll is to administrate the employee records-keeping, tax filing, record keeping etc.

Limited Number of Employees:

As most of the manufacturing companies are small and normally have a limited number of employees, there is a lack of time and manpower to keep an eye on the payroll details of the employees. In most of the times, the number of employees is much less than the number of payroll clerks/ accountants who are allotted to each company. It also requires sufficient knowledge and ability to administer payroll software programs. There are instances where payroll is managed by the human resource departments only.

Improper Entry:

The payroll challenges in the manufacturing industry can be faced through the improper entry of the figures by the payroll department. This often results in entries of incorrect or invalid data thereby making it difficult for the payroll department to process the payroll of the organization. Inappropriate entry of figures may lead to underpaying of certain employees, exceeding the allocated salary limit, failure to inform the employees about some terms and conditions of the payroll policy etc. These payroll issues may result in improper recording of employee details thus creating confusion among the employees regarding their salaries.

Lack of Records:

Some companies do not keep a record of their employees’ details therefore the payroll may show the incorrect number of hours worked by an employee. This leads to errors in the processing of the payroll which may further push up the processing costs of the company. Most of the manufacturing companies have a single payroll department for all the employees of the organization. Hence, there is a possibility that the staff of the payroll department may commit errors in recording the hours worked by the employees.

Payroll Management Software:

With the rise of computerization and internet, payroll has become more automated these days. Hence, payroll management is easier nowadays for all the companies who have made use of payroll management software. However, there is still a possibility of some employees of the manufacturing industry ignoring the instructions of their supervisors. Some other employees might even be fired for not paying the required payroll amounts.

Payroll Period: If payroll challenges occur in the manufacturing industry, the employer will have to implement
appropriate measures to curb such practices. One of the most common payroll challenges in the manufacturing industry is in paying the employees at the end of the payroll period. In such cases, the payroll department might have made mistakes while processing the payroll. The payroll might have been incorrectly computed or the information provided may have been wrong. This will need to be corrected to ensure compliance with the employment laws of the country.

Absence of Payroll Department: Another payroll challenge in the manufacturing industry can occur due to the absence of payroll department employees. For instance, there can be situations when the entire payroll department leaves one day unexpectedly. If there are no replacements to take their place, the payroll
department will have to issue paychecks for the absent employees.

Thus, payroll challenges in the manufacturing industry can arise for many reasons. They can occur due to lack of proper payroll training for the personnel of the payroll department or they can occur due to unavailability of the payroll software used in the payroll department. If payroll management software is not used properly, then the payroll department will face payroll challenges. However, there are solutions available in the market to address all payroll issues.The best solution is to train the employees using payroll challenges in the manufacturing industry.

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