More and more businesses are doing away with traditional paper payslips and making the switch to electronic payslips. Though this may seem like a subtle change, it can actually result in considerable savings and make your payroll management far more efficient and streamlined. From helping your company go green to making it easier to keep accurate records, going digital can transform the way you organise, create and distribute your payslips.
In this article, we take a look at what electronic payslips are, how they can benefit your business and answer a few FAQs to boot.
What are electronic payslips?
As the name suggests, electronic payslips are a digital version of your traditional paper payslips. They’re sent out on a weekly or monthly basis and function in more or less the same way as paper slips. They contain all of the same information as their predecessor but are generated, communicated and stored electronically.
While digitalising your employees’ payslips may not sound particularly groundbreaking, it’s advantageous for several different reasons. Whether you’re looking to enhance your green credentials by minimising paper use or reduce payroll costs by simplifying distribution, electronic payslips can help you achieve your goals.
We’ll take a more in-depth look at how electronic payslips can benefit your organisation later in this article. But first, we thought it best to examine the multiple ways in which they can be distributed.
How are electronic payslips delivered?
While traditional paper payslips were either collected by employees in-person or posted to their home address, electronic payslips can be distributed via a diverse array of channels. Which you choose will depend on your particular circumstances and you may opt for more than one delivery method, giving your employees a choice in how they receive their payslips.
Intranet
Businesses that operate a company intranet can make employee payslips available through the platform. This has the benefit of being relatively secure but also easy for employees to access. Employees can collect their payslips at any time and, if they prefer keeping paper records, can print their payslips, too.
Many companies email their employees their payslips. While this is a legitimate option, you need to think long and hard about whether it’s the right choice for your company. Email is a notoriously unsecure means of communication and as payslips contain plenty of important personal and financial information, we would recommend only using email as a last resort. If you can deliver your electronic payslips by any of the other methods listed here, we suggest doing so.
Mobile App
Some payroll services have launched a dedicated app that lets employees log in to receive their payroll. This is an efficient, secure and accessible means of distribution, making it an excellent option. If you’re reluctant to outsource your payroll services or bring in a third party to provide the service, you could build the app yourself - though the initial investment would negate many of the early cost-savings associated with electronic payslips.
Online Portal
Your final option is to deliver your electronic payslips via an online portal. This shares many of the same advantages as an online portal but is significantly easier to set up yourself. As with all sensitive financial information, security is a big concern, so make sure you’re able to guarantee data security and compliance with GDPR before you do so. In many cases, it’s safer, simpler and more cost-effective to outsource this aspect of payroll operations.
The advantages of electronic payslips
There are eight main benefits to switching to electronic payslips. Let’s take a closer look at each one in detail.
1. Efficiency
To put it simply, digital is far more efficient than manual processing. Yes, the vast majority of paper payslips are created using digital software, but as soon as they come out of the printer, it’s all manual. From sorting the slips to arranging for postage or distribution by hand, paper payslips are time intensive.
However, getting them out to employees is just one half of the challenge. Where electronic payslips really come into their own is after they’ve been distributed. With paper documents, there’s often a considerable amount of enquiries to process once they’ve been sent out. Employees regularly lose, misplace or don’t receive their payslips, resulting in more work for payroll. With electronic payslips, all documents are stored online and are easily retrievable, minimising the number of enquiries they generate.
2. Available anywhere, anytime
Electronic payslips are convenient for employees and employers. Like most digital resources, they can be accessed at any time, from any device. This makes them far more flexible and reliable than traditional paper payslips. It’s also particularly useful for businesses that have a geo-diverse workforce that operates across a large territory and isn’t centralised in a single office block or region.
24/7, anywhere, anytime access also benefits payroll operations by allowing administrators to enter pay details remotely. With a large number of businesses still encouraging remote working practises and growing clamour amongst employees for more flexible working conditions, this will prove beneficial over the coming years.
3. Improved data security
Though they were the best option at the time, paper payslips were never particularly secure. They could be - and regularly were - lost, misplaced, distributed to the wrong person or wrong address, or compromised in some other way. This was just an unfortunate consequence of manual processing.
However, today, we have the means to secure employed data by storing it digitally. It’s important to note that not every digital channel is secure (as we mentioned when discussing email delivery) but that most digital channels can be secured relatively easily. By using two-factor authentication, businesses can create safe and secure repositories for employee pay data and distribute payslips through those channels.
4. Cost-effective delivery
Though it may seem like a relatively small expenditure at first, postage for payslips soon adds up. By switching to electronic payslips, businesses can make considerable savings. Postage is also surprisingly difficult to budget for. Prices change regularly, making it a challenge to plan for the year ahead. Electronic payslips remove this uncertainty and allow you to focus on more important business matters.
5. Combine with important information
Employees can often be overwhelmed by information. Many people receive dozens, if not hundreds, of emails a day and some inevitably get missed, skipped or lost. Typically, this isn’t too big a deal. However, if the information is important, it can be. Attaching essential information or updates to electronic payslips is a fantastic way to communicate such details.
Whether you implement a system in which employees have to acknowledge receipt of the information by ticking a box or you simply add an attached note to the slip, it guarantees that employees receive essential company information. Just be careful not to overuse this feature. If it’s used to convey non-essential information, employees will quickly get wise and may begin to dismiss the notifications without actually reading them.
6. Maintaining records
As we’ve already mentioned, paper payslips are easy to lose. This makes it difficult for employees to keep accurate records of their pay and can cause problems should they need to rely on those documents. With a digital solution, employees always have a complete record of their historic pay and can rely on being able to access documentation whenever necessary.
Digital solutions don’t just stop at payslips, though. They usually also incorporate other documentation, such as P60s, P45s, reward statements and timesheets. This is far more practical for employees and simplifies and streamlines troubleshooting should they have any payroll concerns or problems.
7. Environmentally friendly
Going green is a big deal for a lot of companies. Not only does it demonstrate that they take the climate crisis seriously but it also contributes to a more sustainable business environment. While printing payslips may not increase smaller businesses’ carbon footprint drastically, it can have a significant impact for larger organisations.
Many employees also want to see their employers take steps to demonstrate their green credentials are more than just hot air. Adopting electronic payslips does just that.
8. Simplicity
Overall, electronic payslips are a far simpler way of communicating pay information. Many more of the processes involved are automated, improving efficiency and lowering costs, while other issues with traditional payslips, such as storage, postage and access, just don’t apply to electronic slips. For companies that want to streamline their processes and focus on those aspects of the business that really drive growth and deliver value, electronic payslips are a great way of doing so.
Electronic payslip FAQs
Having examined the benefits of electronic payslips, it’s now time to tackle a few frequently asked questions.
Are electronic payslips compliant with HMRC regulations?
In short, yes. There are no regulations that state payslips must be printed, as long as they’re clear and contain all the relevant information. HMRC accepts electronic payslips, as do banks, ensuring you have no problems in that respect, too. The slips must be delivered in an accessible way, so you will need to make sure you use a common file format, such as PDFs.
What if some employees prefer paper payslips?
Whether you choose to go entirely digital or offer employees a choice is entirely up to you. Though continuing to print some payslips won’t result in the same cost-savings as going fully digital, it will still save you a considerable amount. If you do opt to only distribute payslips electronically, it’s a good idea to check that none of your employees have issues with access. Not all employees have the technology required to open and read digital documents, so an alternative solution will need to be found if this is the case.
How do we make the move to electronic payslips?
In general, your first move should be to contact a payroll services provider, such as Finesse, to discuss your needs and get a quote. This will give you a benchmark against which you can compare the cost of rolling out your own electronic payslip system.
Next steps
If you would like to find out more about the way electronic payslips can improve your payroll operations, get in touch with us at Finesse and we’ll be happy to discuss what going digital can do for you. You can reach us on 03303 201 924 or contact us electronically, here.