The UAE business regulations require all types of businesses either small or large to keep their accounting books of record for minimum past six years which also includes payroll accounting records. Payroll accounting involves many tasks including the calculation and dispensation of wages along with keeping a record of the whole process. It also involves reporting activities in which payroll and labor expenses need to be reported to the company’s management. Despite being the most significant and commonly performed type of accounting, payroll managers still face many challenges, especially in small businesses. Instead of stressing about these challenges, companies should look for solutions such as hiring payroll processing companies for small businesses or even large businesses.
Payroll Accounting Challenges
Payroll and accounting challenges do nothing except burden the in-house payroll processing team of the company. This gradually makes the payroll system inefficient leading to malfunctioning, mismanagement, and fraud. Most payroll and accounting challenges can be solved by directly hiring firms that provide payroll services in Dubai or UAE. Following is a detail about common payroll challenges for small businesses and how outsourcing is a solution for overcoming these challenges;
Issue of Confidentiality
There is an increasing advancement in the field of technology which can not be ignored. When it comes to technology, both positive and negative aspects can be observed. This is where data security and confidentiality challenges and threats arise. A most common privacy and security challenge that small businesses face is a data breach. Since small businesses are technologically less advanced, there is always a threat of data breaches. A straightforward solution for this problem is to outsource payroll functions. Since payroll processing firms utilize advanced technology and software, there are hardly any chances of a data breach. Also, they take complete responsibility for the privacy and security of your company’s personal data. Hence, companies in the UAE that face confidentiality issues should outsource their payroll right away.
Issue of non-compliance with business regulation laws
Business laws and standards in the UAE are rigid just like every other region of the world. All businesses in the UAE need to make sure that all the payroll functions they perform i.e, wages, taxes, etc, comply with the standards and regulations in the UAE. Since this is one of the factors for a successful business in the UAE, it can not be ignored at all. Also, these regulations frequently update requiring the payroll managers to be actively keeping an eye on the updates. Missing any update can lead to serious consequences i.e, law breaching, etc. The stress of non-compliance with business regulations can be avoided by outsourcing payroll functions. Outsourced firms never miss any updates and make sure that all payroll processes comply with the standards always.
Challenges of manual payroll system
One of the most ordinary attributes of small businesses is that they perform payroll functions manually by using administrative approaches. Such a system depends greatly on a bunch of paperwork. There are different factors that denote how undesirable manual payroll can be. In the first place, it makes the small businesses hire a large number of employees. If a large number of employees are not hired, it burdens the staff and takes extra time and energy out of them which is a negative impact of the company. Moreover, the world of business has been advanced which leaves fewer opportunities for small businesses that utilize such outdated systems. Outsourcing payroll functions is a way of walking hand in hand with the advanced business world. In a preset budget, payroll outsourcing companies utilize the latest technology to perform payroll functions for your company. This eradicates the probability of errors that is high in the manual system along with countless other benefits.
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Burdonizing other departments
Apart from general payroll processing, payroll accounting is another functional unit of a company that requires a different team of employees to solely focus on it. Companies that do not have a separate department for payroll and accounting tend to burden their HR department or finance department to do the tasks that should be done by payroll and accounting experts. This retains other departments from focusing on their own tasks and creates confusion at some points. Outsourcing payroll and accounting functions is a one-stop solution for these issues because it is vitally important to let different departments focus on their specific job.
Small businesses that employ outdated systems and sometimes no software are more likely to delay wages and other similar functions. The efficiency of small businesses decreases because most of them do not utilize a wages protection system and process payroll and accounting functions manually. These manually performed tasks are time-consuming and error-prone to great extent. Even a few delayed payments impact the payroll record highly. Also, it demotivates the employees who work for the company’s goals. It is possible for small businesses to outsource these payroll functions while taking their limited resources into consideration. Payroll outsourcing companies never miss payments or delay them.
Choose FAR Consulting Middle East
Payroll processing and accounting can be challenging tasks for small businesses as mentioned above. The best way of avoiding these challenges while taking care of the resources is to hire qualified payroll service providers no other than FAR Consulting Middle East. Our qualified and seasoned service providers can manage your payroll with great accuracy and efficacy. Our first priority is to help you develop your business in the UAE. Ask more from our experts about payroll processing and accounting.