- January 10, 2018
- Posted by: admin
- Category: Payroll & Compliance
It is that time of the year where festivities are all around. Now that Navratri has come up, followed by Dassera and Diwali, it is common to see employees on a shopping overdrive. With increase in shopping, comes in the requirement for short term funds as well. Employees do have options of going in for personal loans with banks, but prefer to reach out to their own organizations first to see if loans/advances can be issued.
HR teams across organizations typically work on a policy document about how much advances can be issued at what levels within the organization, at what rate of interest, for how many months etc. While this helps keep this decision making simple and process oriented, loans and advances do create additional pressure and work for the payroll team to manage.
While banks have ready calculators and systems to manage EMI, principal credits, interest credits etc., organizations typically struggle to manage these challenges and with each case being different, it is necessary to manage this well, so that there are no errors in payroll and also to ensure that recoveries of loans issued are done, as per the schedule defined.
As there are compliance/government norms involved related to loan/advances, handling them with accuracy at times brings in challenges. Impact of these loan/advances on the annual IT returns of individual employee, needs to be considered appropriately and so as the impact on organization. For e.g. : Have we calculated the actual perquisites basis SBI Lending Rates? Are the factors/calculations under various loans/advances categories being considered? Have we accurately tracked the previous loans/advances taken by the employee in the same financial year?
At Finsmart Solutions, we understand the complexities involved in employee related loans/advances and have templated these complexities to handle them with utmost accuracy. Much of it is system and process based and it helps companies manage the loans/advances in a seamless manner.
If you have faced challenges with managing employee loan/advances in past, we will be happy to help and streamline this for you. After all, we should all make sure that employees can really enjoy the festive season and employment ahead.
I hope you find this useful. Your feedback and suggestions are welcomed.
If you need any help to drive your Payroll operations efficiently, please feel free to reach out to Finsmart Solutions your “Trusted Growth Partners”.
Abhishek Shrivastav (Finsmart Solutions)