Cashflow as the name suggests is the money running into a business and the amount of money running out. Cash is important to keep meeting your expenses, which is why it is a vital element to keep your business afloat.

Cash inflow happens from sources such as payment from customers, receipt of loan, investment from investors and later on outlayed to meet the expenses such as  raw material and inventory costs, employee salaries, rents and other operational expenses.

Therefore, this helps us decipher  how a positive cash flow is important for a business to run smoothly and a higher cash flow helps you create possible avenues for your business.

Let’s learn how payroll can help build a positive cash flow

The way you are handling your payroll services has a lot to do with the success of your business. An erroneous pay process might waive a red flag to your employees, clients and capitalists which is unhealthy for your organiations growth. Discussing few points to give you a better understanding on the do’s to keep the cash inflow of your business burgeoning.

• Encourage clients to pay their outstandings early :

Client’s who owe you money might be unwilling to pay off their debts quickly, which might trigger problems in your cash flow. Therefore, you may apply the following techniques to encourage them pay their outstandings, by

1. Promptly issuing invoices and following them up regularly.
2. Offering attractive early pay-off discounts.
3. Charging an upfront deposit or scheduling pay deposits at regular intervals incase of long term projects.

• Maintain a separate cash reservoir :

At times, company  might  go through rough phases of their business life cycle, which is why maintaining a separate  cash reservoir to meet the immediate cash flow needs for a duration of a few months or even a year during the lean times is essential.

Recent pandemic however has been the best example to prove the importance of the aforementioned necessity. We did witness companies adopting savage measures to cope up with the difficult times by furloughing, laying off, forcing unpaid leaves, etc for their inability to pay their employees. This has undoubtedly tarnished the company reputation to a great extent and removing such stains off their image might take ages. Would  you  ever prefer working for such a company in future? Your answer itself is self-explanatory for having such a reservoir handy.

• Opting for a short-term loan :

When the debtors stay unanswered to your calls for the delayed payments, you can apply for a short-term loan, to pay your employees accurately on the pay day’s. Money is a major motivation and people are the assets of a company, absence of money can result in loosing out on your valuable possessions which might cost you substantially.

• Encashing high-valued belongings :

If you donot want to opt for a loan, you can instead sell your not so important belongings and manage the money to meet your payroll needs at the moment. Selling out properties such as company stocks, vehicles, real estate, office equipments and other insignificant possessions can help you fix some of the current cash crunch issues. But these are just quick fixes and not a permanent solution and hence should be considered as a last resort because recouping of such assets in future might cost you heavily. Choosing wisely might help.

• Factoring your invoices :

When you are  left with too many unpaid invoices, you can apply these techniques to make them take you more seriously.

1. Keep frequenting notices to let them know that you are not letting the debt remain uncollected even if they have the capability to pay or not.
2. Keep a lawyer who can mail legal notices for such heedless actions and also draw up a contractual agreement including remittances such as collection of a particular percentage of money on placing the order and the right to withold the delivery of the final product or services until the full and final settlement is made.
3. Employ collection agencies to follow up with the debtors.
4. Network with other business owners to gain insights on dealing with such business related matters.

• Cutting down on overhead expenses :

It is always advisable to prioritize your employees payroll instead of spending excessively  on other irrelevant concerns. The expenditures made should be value for money and not just because everyone else is jumping on the band wagon. 

The most valuable asset of any company is its workforce. The number of people employed in a company termed as ‘manpower’ is the most vital component of every business organization. The rapidly evolving and competitive business environment has made it all the more imperative for a business organization to be sensitive towards its manpower. Besides, the outbreak of the Covid pandemic has reinforced the need to rethink and redesign our policies keeping the workforce in mind.

It is indeed true that outsourcing manpower today has become an extremely viable option. In fact, outsourcing manpower proves to be beneficial in quick accomplishment of your business goals as it helps save time and money, improves efficiency, and protects from legal complications.  Yet, you can face several challenges when you decide to outsource your manpower.

Some of the prominent challenges faced while outsourcing manpower are:

1. Devoid of Connection: One of the primary challenges faced when outsourcing manpower is the loss of connection between the employees and the employer. Employees address their queries regarding medical, leaves or training to the HR department. Now, if such a vital function — HR is outsourced, it is quite possible that the employees of the company feel disconnected. The employees will get the feeling that personal touch is lost between them and the company.
   
   
2. Delay in response: Another significant challenge faced when outsourcing manpower is the delay in response from the manpower outsourcing provider. It is quite possible that the employees’ issues, problems and queries are not properly responded by the outsourcing provider as compared to the speedy response received by an in-house HR team. Now, in such a scenario, employees can begin to feel neglected, angry or disappointed with the company.
   
   
3. Security of employee data: When you decide to outsource your manpower, you hand over sensitive employees data to a third-party. Hence, you must ensure that the manpower outsourcing provider protects your company data from any kind of theft or risk. Loss of data can lead to the loss of faith and trust between the employees and the company.
   
   
4. Loss of experienced HR personnel: Even when you hire a manpower outsourcing provider, it might be necessary for you to appoint an HR executive to monitor its proper working. The manpower outsourcing provider could deviate from your company’s policies or norms. In such circumstances, you will feel the need of having a competent in-house HR executive to take care of the needs of the employees.
   
   

Conclusion

Therefore, to conclude, outsourcing manpower is being increasingly adopted in today’s dynamic scenario. However, the biggest challenge of outsourcing manpower is not having an in-house HR executive to give immediate response and resolve the daily issues that come up in every working culture.  Nonetheless, companies can select one of the best manpower outsourcing provider ensuring to keep the interrelationship between the company and employees intact and fruitful. It is imperative to keep your manpower happy and satisfied even when outsourcing to ensure the rapid growth of your business.  

Remote jobs or the work from home arrangement has been on the rise from a number of years now. But all these years since the job opportunities began to climb and the an increasing number of organizations also became more open to the idea of letting people enjoy the flexibility of working from home, the option to work remotely from home became a voluntary and welcoming one.

As opposed to that, what is going on today with COVID-19 has compelled people who are used to working from office to stay put at home and coordinate with their colleagues and managers for the work arrangements remotely over the internet.

It is on this given condition that employers need to take all measures to ensure that their workers do not feel demotivated or disturbed and enable remote working at scale. So, how do they do that?

Let’s look at some of the ways senior level managers in any organization can use to keep the motivation and engagement uninterrupted.

Resetting of goals

As with all the unplanned events, this one has also forced everyone – from organizations to their employees – to take a pause and start wondering how they are going to deal with this unexpected development that didn’t even give them a time to warm up, and this has affected the short- and long-term goal setting process. No one was mentally prepared for it, the outbreak happened and suddenly everyone found their objectives and key goals taking a hit. Organizations can set new deliverables for their employees for which the right tracking metrics can be put into place. The tools of the nature of Zoom, Slack and Skype have to be leveraged fully to get updates and ensure no one is veering off the company objectives.

Enhance teamwork on personal level

As touched upon earlier, the remote working culture has already made its way into the market. And this is meant there are a host of tools and applications for people to use in order to seamlessly engage and collaborate with their co-workers. But we’re not going to suggest only the likes of Zoom and Skype, what you also need to do additionally is employ ways to keep the engagement between the different individuals high even on a personal level. You can invest in virtual team activities like games, quizzes, and so on that helps workers bond with each other.

Encourage upskilling

The daily routine of office, where even after accomplishing a day’s work the employees are required for unproductive activities like some unnecessary meetings, some HR sessions that they can do without, or even some self-attracted distractions like a game of Foosball or Table Tennis, leaves no time to learn new skills or enhance the existing ones. In a world where we have platforms such as LinkedIn Learning, Udemy, and so on, you can as an employer purchase courses for your employees so that they can make the best of their work from home routine whenever there is time to spare.

Conclusion

While Covid-19 may have brought the world to its knees, organizations have a variety of options through which they can invest efforts to keep their workers engaged and productive.

It goes without saying that payroll is one of the most critical functions of any business, regardless of its size and scope. At the same time, it is also a function that runs on processes of great complexity and requires near to zero margin of error.

Outsourcing the process to a payroll management firm helps businesses circumvent all the challenges.

 Let’s explore outsourcing and try to answer why mid-sized companies should opt for payroll outsourcing services

Reduces process overhead

If we talk specifically about the mid-sized companies, even if they put in place a sizable accounting department, managing the payroll processes of a large number of employees in a typical mid-sized company is a task fraught with complications, with scope for unexpected changes or events every step of the way. In such a scenario, even the accounting department stocked up with the best of resources can sometimes find it overwhelming to manage a plethora of sensitive information that should be organized in a flawless manner. Every single mistake made in a payroll process can trickle down the chain of subsequent processes and snowball into a business-critical disaster.

Outsourcing payroll unburdens you of the load and process overhead to be able to focus on the business intensive functions.

Avoid Tax Penalties

The fact that companies all across the world end up paying humongous penalties to income tax departments for late or incorrect filings has almost become a norm, so much so that business owners have learned to live with having to pay fines at the end of every financial year. Does it have to stay that way? Of course not. This is where a professional payroll service firm proves to be a major asset.

Such a firm employs experts who compute payroll taxes, take care of all filings and take into the account the possible penalties that you might face, based on the information you have shared with them. If there are areas that may attract penalty, your outsourcing partner has the resources and the wherewithal to identify as such and fix before it can cause problems.

Save Costs

Payroll management, as mentioned earlier, is a function that requires large investments into resources and manpower. Each process that goes into computing all the calculations and the in-house bookkeepers responsible for ensuring the processes are carried out flawlessly, both come with a significant cost, that takes away from the budget that a business needs to allot for the core business processes. However, the payroll management firm that you outsource this activity to employs the industry best practices to carry out payroll management that is a core business for their growth. One of the latest trends that is being observed increasingly is the accountants and bookkeepers that business owners take financial advice from every once a while advise business owners to outsource the payroll function for its cost saving benefits.

Conclusion

With the payroll function outsourced to experts, you can rest assured that you won’t be investing extra efforts or money or even paying avoidable tax penalties. However, choose your outsourcing partner after due research and diligence.   

Payroll management is certainly a core function of every organization. It entails handling acompany’s administrative function including the finances, HR function and employee management. Successful payroll management services ensure cordial relations between the employees and the employer. Moreover, it creates a good impression about the financial goodwill of the company among its employees, who are further motivated to work harder in their designated roles.

Successful payroll management services is a must for every venture whether a start-up, small or medium sized company or even an MNC. The existing dynamic business scenario has come up with several challenges for delivering successful management services.

Let us go through some of the essential tips for maintaining successful payroll management services.

1. Implement a paperless payroll process: The digital age comes with the benefit of electronic transactions and database management systems. Manually, it is extremely difficult to maintain record and preserve data of numerous employees making it more prone to error. Hence, electronic transmittal of payroll is a must for successful payroll services. Also, security of data, ease of calculation and seamless disbursal of salary is achieved with the electronic payroll system.
   
   
2. Bring together different pay schedules: One of the means of ensuring successful payroll management services is to keep one pay schedule for all employees of your company. You might have come across companies who categorize employees such as contractual, permanent, freelancers and designate varying pay schedules for them. When a company decides one single pay schedule for all its employees, it removes multiplication of processes, executes seamless payroll management with no errors.
   
   
3. Install the right software: Leveraging digital technology is one of the significant ways of managing successful payroll services. However, the trick lies in installing the right software suited to meet your business needs and budget. You can either select from the multiple software options available in the market or built an in-house software which can be easily integrated with your business processes.

This digital software will ensure error free calculation of salary, tax deduction, leave balance, and so forth. Moreover, you can even generate electronic pay slips at the click of the mouse.

4. Make your payroll system compatible: It is extremely vital that your payroll software integrates well with your accounting system installed in your company, say, for instance, SAP. There needs to be compatibility between the two systems to ensure error-free and accurate calculation and disbursal of payroll services.
   
   
5. Stay updated about the latest rules and regulations: Efficient payroll management services can be delivered only when you stay updated about the latest rules and regulations implemented in your country with respect to employees, gratuity rules, EPF, medical reimbursement and other crucial salary components.  This will facilitate making accurate payroll assessment keeping your employees satisfied as well.
   
   
6. Outsource your payroll management service: One essential tip for maintaining successful payroll services is to outsource it. Yes, you heard it correct! These days, payroll outsourcing has become the norm especially after the outbreak of Covid-19. Outsourcing your payroll management function will give you the benefit of saving time, money, effort and most importantly no stress. These payroll outsourcing firms are equipped with financial and technical professionals who deliver seamless payroll services fulfilling your business expectations.
   
   

Conclusion

To conclude, efficient handling of payroll management services is considered as a hallmark of a successful and competitive company. It also keeps the workforce happy and motivated. Simultaneously, it creates a positive brand value for the company in the market.   

The sudden outbreak of the pandemic Covid-19 has put an unanticipated halt to almost all the economic activities across the globe. The Indian economy has also been bearing the brunt of this economic halt which came in the guise of lockdown imposed in the country for three to four months. In June 2020, the International Monetary Fund (IMF) announced that India’s growth rate would decline by 4.5 per cent due to slow recovery from the novel Corona virus and a longer period of lockdown. However, India’s economic growth is expected to bounce back to six per cent in the year 2021.

The novel Corona virus forced the economies of the world to impose extended lockdown which has had severe impact on the business scenario and hence, the livelihood of people. However, several countries have started to recover and have gradually restarted their economic activity. India is no exception to this activity. After approximately three to four months of extended lockdown, the Indian economy is gradually coming back on its foot. The government offices and several private business houses have reopened their office premises with strict adherence to safety measures of the employees.

The lockdown period in India witnessed tremendous growth especially in some sectors such as OTT platforms, e-commerce, FMCG, pharmaceuticals and others.

It is to be noted that the medicine and healthcare sector has been at the forefront of the fight against Corona Virus. For instance, the manufacture of masks, hand gloves and sanitizers witnessed tremendous growth in the country. Even the Personal Protective Equipment (PPE) and ventilators are getting manufactured in India in large numbers.

 The lockdown imposed by the Indian government proved to be a boon in disguise for the FMCG sector. The various companies operating in this sector such as Nestle, HUL, ITC, P&G, Godrej Consumer, Dabur, Amul and others expected a sudden rise in the demand of their products. In simple words, the general public decided to stock the essential commodities at home. However, it is to be noted that these companies faced supply chain challenges during the lockdown period for arranging the delivery of essential items during the lockdown period.

With the passage of time, the government permitted the online delivery service to function during the lockdown period. As a result, some of the companies such as BigBasket, Grofers, Amazon and Flipkart witnessed a sudden surge in the online delivery of essential items.

Another sector which witnessed unprecedented growth has been the consumption of online content. Since the general public was locked inside their houses, the companies such as Netflix, Amazon Prime and Disney Hotstar saw a rise in the consumption of their online content.

Likewise, the online education industry witnessed an unprecedented expansion during the lockdown period in the country. Since schools and colleges were shut down, the online medium of education witnessed a surge. The government even devised rules and guidelines for schools to impart online education to children.

Unfortunately, the start-ups were adversely affected by the lockdown which seriously impaired the business activity in the country. Several start-ups had to be closed down without notice leading to unemployment of employees. In addition, several companies who witnessed decline in their business activity (such as the hotel industry, aviation industry and others) were forced to disburse deducted salary to their employees during the lockdown period. Even the small businesses have suffered heavy losses due to the outbreak of the Covid-19 pandemic.

Therefore, to conclude, the state of businesses has been badly affected in 2020 due to outbreak of the novel Corona virus. With no medical solution at hand, one will have to live with this virus for some time now. After the unlock initiated by the Indian government, businesses have attempted to return to normal business operation but with precaution and safety. Undoubtedly, the business sector will bounce back with vigour and will exhibit growth in 2021.