Advantages of Using a Payroll System for your Business in the Philippines

advantages of payroll system

Before diving into buying yourself a payroll system for your business, it is righteous enough to know first why you are buying one? Will this be an asset that could help the company’s state? Will this help in a quicker production of payroll?

Here in the Philippines, wages are deducted from taxes and other government requirements as these are mandatory deductions and obligation of a working employee.

Another is to increase in salary due to holidays as the Philippines has quite the list of holidays in a year. Though these movements to your salaries are foreseen changes, having a payroll automatically computes it for you makes production of payroll a lot faster and accountable for little to no human error. But what really is a payroll system.

What is a Payroll System?


It is a software created and designed to not just compute an employee’s salary as well as the deductions such as taxes and government deductions. This also includes the filed leaves of absences whether it is a vacation, sick, or emergency type of leave, it will then be compiled alongside the computation of an employee’s wage.

On a more technical side, the system includes gathering of timekeeping information, computation of wages, disbursement of salaries and pay slips.

Advantages of Using a Payroll System


Accuracy is expected


Initially, a user will need to input a new employee’s information together with their salary without deductions. The system will then compute the wage in a recurring basis minus the deductions to output the deducted salary. The good thing about this system is due to the little interaction of manual actions, accurate outputs are expected.

If for some unknown reason, a system suffers from a glitch, the business could then ask for a refund from the provider as it is an anomaly in their created system and accounts for a money back unlike when it is a manual mistake wherein reimbursement could be done to subordinates.

Lesser cost


How it is less? Simple, compare hiring an accountant who will do the manual monthly computations and produce reports within a certain time though works for a small company but if the company is a bigger one then this could be time-consuming and be prone to human errors unlike having a system to do the job for you.

Operation of this system requires little human intervention as the system is already capable of the complex computations needed in producing an employee’s payroll. To make the investment worthy, be sure to have the produced system be created according to your needs to ensure effective and efficient computations.

Adaptable to change


Since every regime in the Philippines always wants change, it is not a shock that every government deductions will be changed as well. It is good to note that a payroll system provider has the capabilities to deliver a system able to cope with the changes thus making it adaptable to changes.

Promotes higher security


How a payroll system promotes security? A payroll system prevents payroll frauds in such are ghost employees (employees who are included in the payroll system but is no longer or is not working for the business), payment manipulation or data breach.

It is of good note that the system notifies users to update login credentials to avoid data breach. The update could be every month or quarterly or what fits best to the business.

Note: Before acquiring a payroll system, be sure to be knowledgeable of the processes of the payroll system in the Philippines as this is crucial to computing an employee’s salary.

Having a payroll system for your business in the Philippines would enable you to have accurate results in no time enabling the company to focus their time to other business activities.
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Accounting Due Process: FASAB’s Rules of Procedure

fasab-rules-of-procedure

The Federal Accounting Standards Advisory Board since its establishment in October 1990 has devoted itself to serve the public interest by improving federal financial reporting through issuing federal financial accounting standards and providing guidance after considering the needs of external and internal users of federal financial information. It has become a significant entity not just for the accounting industry but also for those other industries that involve auditing, payroll, and taxation in general. The accounting outsourcing industry is also put into a conversation as any movement to the standards of accounting set by FASAB should be reflected in their procedures regardless if they are offshore or within the boundaries of the federal state.

As complex at it may seem to decide on actions on how to keep the accounting standards in good shape, FASAB has been able to stay true to its mission thanks to its rules of procedure which has also been their guideline in adhering to the Federal Advisory Committee Act. Through this, FASAB can ensure that the common understanding of the information provided through financial reporting by participating in educational efforts and that its own accountability through governance practices that are transparent and consistent with the Memorandum of Understanding among its sponsors. This is all while considering the views of other accounting trend-setters (international trend, trends upheld by other industries like accounting outsourcing, the World Bank, and offshore markets) and the stakeholders.

In order for FASAB to conduct a timely, open, and thorough study of the accounting issues that might affect the accounting standards, FASAB acts on the following steps:

1. Identification of accounting issues and agenda decisions. FASAB consults and syncs with the Executive Director to first identity projects that need prioritization among its potential projects. When a new project is decided it is added to the list of active agendas and is weighed by the board on how to deliberate on them. A pre-agenda research should be conducted to ensure that the issue has supporting data before being presented in a meeting.

2. Preliminary deliberations. The FASAB deliberates on active agenda items at its meetings. Through this process, FASAB will able to ensure that all issues are identified and alternatives resolution to issues are developed, assessed, and ranked.

3. Preparation of initial documents. FASAB requires that documents that provide background information about the presented issue, summaries of the concepts being developed, and initial listing of options including the possible impact of the resolution are initially prepared before a meeting.

4. The release of documents for comment (e.g., exposure drafts) to the public, public hearings when necessary, and consideration of comments. 

5. Further deliberations and consideration of comments. As the situation demands, FASAB may go under series of deliberations that will require members of the board to further investigate and schedule a further meeting that requires further preparation of documents to support the proposed solution to the issue. 

6. Voting. When the Board has finally decided to proceed to a final pronouncement due to the lack of further substantive revisions to the proposal in the exposure draft then it will require the approval by at least a two-thirds majority affirmative vote of the board.

7. Submission of proposed Statement to the Principals for 90-day review (45 days for Interpretations). 

8. Publication of final Statement or Interpretation. The final statement is then released for public dissemination.

Accounting will remain as a pillar industry that holds other industries to stay intact. And with the help of the Rules of Procedure, we can make sure that we will be able to uphold a fair and safe system of accounting.

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