The transformation of companies through the use and exploitation of technology is a step that can no longer be avoided. This automation, or digitization, as some also call it, reached the payment of wages and salaries to workers. Above all, in January 2017, the way of issuing payroll receipts changed.
By the official provision, we went from paper to electronic format with the Digital Payroll; for taxpayers was established to increase the quality of information sent to the tax authority using the Internet Digital Tax Receipt (CFDI) for the payment of wages and salaries.
In terms of the Tax Administration Service (SAT), through Digital Payroll, greater control is allowed in calculating and paying wages and salaries, management of perceptions and deductions, benefits and other concepts for employees.
Right here, the acquisition and use of payroll software have become important. This tool allows you to automate the calculation, generation and payment of salaries and wages from start to finish, complying with the most recent obligations of the SAT. One of these, for example, is using CFDI version 3.3 and Complement 1.2.
The Digital Payroll applies to all businesses registered in the SAT taxpayer registry with staff under their charge. This is regardless of its size or business, the number of employees you have and the payment periods.
Digitization and Payroll Receipts
Making long lines at the office cashiers to receive the payment of our salary became history. At least in the vast majority of companies and institutions. Today are to receive our receipt via email in PDF and XML formats.
The tax authority promoted the big change by introducing and making the CFDI mandatory.
First, it started with Electronic Invoices and later with Electronic Accounting. However, in the latter, the digital receipt is not used. It mainly uses XML files to present Charts of Accounts and Trial Balances.
Then it was the turn of the payment of wages and salaries with Digital Payroll. Even to comply with this, the use of Excel® to keep track of payroll was also left behind. Currently, this tool falls short of calculating deductions and perceptions in terms of salary payments and knowing what the withholdings are to be made, among other actions.
And it is that Digital Payroll asks for very specific data, and in the same way, the payroll receipts must also receive a “stamp” from an Authorized Certification Provider (PAC); to validate that the most recent changes and obligations stipulated by the authority are being complied with.
According to surveys by the consultancy firm Ray Human Capital, “companies are very aware of the need to face the transformation towards a new digital scenario in the short term and of the profiles they need to achieve it.”
However, they highlight a lack of guidance regarding where to look for these profiles and what tools to access them. “The best way is to investigate and get to know each of the companies that offer these services and make comparative charts of the costs, advantages, disadvantages and functions they perform,” they mention.
Digital Payroll is no exception. To fully enter it, you need two elements:
1. Technology, specifically payroll software, to record employee information, calculate earnings and deductions, enforce compliance with obligations, share information with the Accounting Department and record the payroll payment to make it deductible. Using payroll software only implies configuring the parameters and formulas to make the calculations and payments of salaries and wages.
2. Have the services of an Authorized Certification Provider (PAC). We had already commented that payroll receipts are now digital (CFDI) that, to be valid, require validation by a third party that we know today as PAC. The main function of this figure is to validate that the payroll receipts include all the requirements requested by the authority. Once it does, it gives a stamp to send the payroll to the SAT and the taxpayer who issues it.
What to consider when choosing Best Payroll and Accounting Software
When considering purchasing payroll software, ensure, as number one, that it is updated to the new provisions of the SAT. In that sense, remember that:
1. The SAT requires consistent payroll information.
2. The authority modified the Payroll Payment Complement and created version 1.2 and version 3.3 of the CFDI, valid as of 2018.
3. The Payroll Payment CFDI is the only means of obtaining payment information for a worker.
The payroll software must cover these three elements. Thus, you have the certainty that you will comply with the provisions of the Digital Payroll, you ensure the issuance of your CFDI and, likewise, you can store them, send them via email, cancel them in case of an error or a modification; issue and reprint receipts from different branches, if applicable, among other actions.
In addition, with payroll software, you reduce errors and expenses and improve information analysis. Without a doubt, you ensure that your receipts are valid because communication is constant between the PAC and the SAT.
A separate recommendation is to stay updated on changes to tax laws, a situation that benefits you because you will always comply promptly.
Regarding tax obligations, it will help you to be up to date with all the requirements and the breakdown of taxes such as ISR and other concepts: employment subsidy, IMSS and Infonavit fees, vacations, incidents, vacation bonus, bonus payment and utilities, settlement, among others.
Additionally, there are aspects to consider, such as:
· Response capacity and subsequent inclusion regarding tax changes or obligations such as IMSS, Infonavit, and ISR, among others.
· Choose an up-to-date and versatile supplier that offers you what your company needs. That is to say, its programs are adaptable for managing your salary payments, and the updates in the system are constant.
· Have sufficient security that your employees’ data will be well protected and that only authorized persons will have access.
· Technical support. Look for technical support to be effective, whether online, by phone or in person, but to solve your problems efficiently and quickly.
· Keeping up to date with tax updates is an important issue, and your service provider can keep you updated and informed of these changes so as not to have problems with the Tax Administration Service (SAT).
· When entering the data and working with the software, the process should be easy for the people in charge.
· The price. The service is paid monthly or annually, and what services it includes.
· The experience. Take into account the years of experience of the company that offers the service.
How to choose the Best Payroll and Accounting Software?
You must follow these steps to choose the payroll software and not die trying.
#1. Always remember that the software adapts to you and your company, and not the other way around:
You should not have the training to understand software. The system must adapt to your needs; there will always be times to clarify doubts, but the software must make your life easier and never complicate a process.
#2. Any type of payroll software should be easy to use:
- Ask for a demo.
- Go into the software.
- Analyze it for 30 seconds and close the screen.
Did you understand how to do the basic things of a payroll? Manage employees, add news, settle payroll, and manage social benefits. If you could understand it, you’re on the right track.
#3. You must have a super test team that gives you advice whenever you need it:
it is vital that you have a support advisor who guides you and helps you implement the software from the first moment you start using it so you ensure a path much calmer.
What features should the payroll and Electronic Payroll software you choose to have?
Right now, we are in a time where there is a wide variety of payroll software in the cloud; it’s like going to a supermarket and finding thousands of options!
This software promise to optimize time and quality work and minimize human errors that can occur when entering information manually with the old Excel formats, but no more!
We declare war on Excel and DIAN, and we want you to take your time to make the right decision. This is what you should keep in mind:
● Type of clients
● Possibility of integration with your accounting software
● Software payment method
● Possibility that the client and the accountant can interact with the software in real-time
● Cloud software
If you want to create custom software for your business then click here.
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