How a 100‑Employee Manufacturer Cut Payroll from 7–8 Days to 1 Day with iHRMS
How a 100‑Employee Manufacturer Cut Payroll from 7–8 Days to 1 Day with iHRMS
Reading time: ~4 minutes
Industry: Manufacturing
Team size: ~100 employees
Outcome: Payroll cycle reduced from 7–8 days → 1 day; audit‑ready salary registers; no last‑minute delays.
Executive Summary (TL;DR)
A manufacturing client spent a full week each month on payroll. The complexity: three salary types (staff on calendar days, workers on fixed rate, workers on hourly rate), different bonus & OT slabs by group, and loan opening/closing balances that had to reconcile with a custom salary register. We configured iHRMS to run all three salary types in one cycle, automated OT/bonus rules, integrated loan tracking into the register, and streamlined validations. From the second cycle onward, payroll comfortably closed in 1 day with audit‑ready outputs.
Client Context
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Workforce mix:
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Staff on calendar‑day salary
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Shop‑floor workers on fixed rate
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Contract/contingent workers on hourly rate
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Policies: Distinct bonus and OT slabs per group
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Loans/advances: Monthly opening/closing balance reconciliation required in salary register
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Process reality: 7–8 days/month spent on manual validations and cross‑checks
Business Problem
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Multi‑pay structures forced parallel calculations, increasing rework
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OT/bonus variability created manual lookups and error risk
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Loan reconciliation sat outside payroll, causing mismatches at month‑end
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Validation burden: data fixes across attendance, loans, and payroll files
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Operational impact: salary credit uncertainty and last‑minute rush
Objectives
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Single‑run payroll for all three salary types
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Automated bonus & OT application per group
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Integrated loans ledger tied to the salary register
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Audit‑ready outputs with maker–checker and exception flags
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Consistent T+1 salary credit (no end‑month firefighting)
What We Implemented in iHRMS
1) One‑Run Payroll Engine (Multi‑Policy)
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Configured policy groups for the three salary types
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Mapped eligibility, proration, attendance drivers, and rate cards
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Executed one consolidated run with group‑wise rules applied
2) Automated Bonus & OT Slabs
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Parameterized slabs/caps per group (e.g., double‑rate OT only for hourly workers)
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Auto‑calculation at runtime with transparent line items in the register
3) Loans/Advances Integrated into Salary Register
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Loans ledger maintained in iHRMS; opening → transactions → closing
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Auto‑reconciliation so register totals match ledger balances
4) Validation Workflow & Maker–Checker
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Pre‑payroll validation pack (missing punches, rate gaps, loan anomalies)
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Exception flags and assignment to owners; re‑run only deltas
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Maker–checker approvals with audit trail and SoD controls
5) Compliance & Reporting
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Audit‑ready salary register in client format
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Statutory packs prepared for PF/ESI/PT/LWF
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Export feeds for accounting/ERP and BI dashboards
Implementation Timeline & Approach
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Discovery & config (Weeks 1–2): Policy mapping, register format, loan rules
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Parallel run & UAT (Weeks 3–5): Two payroll cycles run in parallel; variance tracking
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Go‑live (Week 6): Single‑run payroll adopted; owners trained
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Steady state (Month 2 onward): Payroll consistently closed in 1 day
We avoid big‑bang changes. Two parallel cycles ensured trust in the numbers and smooth adoption.
Results
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⏳ Cycle time: 7–8 days → 1 day
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📄 Registers: Audit‑ready, client‑specific formatting
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🧮 Rework: Exceptions surfaced early; fewer last‑minute fixes
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💼 Salaries: No delays at credit time
Before vs After (at a glance)
| Area | Before | After |
|---|---|---|
| Payroll engine | Multiple runs per group | One consolidated run |
| OT/Bonus | Manual lookups | Automated slabs/caps |
| Loans | Off‑system reconciliation | Integrated ledger ↔ register |
| Validations | Week‑long checks | Exception pack + maker–checker |
| Compliance | Manual collation | Ready packs (PF/ESI/PT/LWF) |
Frequently Asked Questions
Q1. Can iHRMS really handle different salary types in one run?
Yes. Policies are attached to groups; the engine applies rules per group and outputs a single register.
Q2. Our OT/bonus rules change frequently. Is that configurable?
Slabs, caps, and eligibility are parameterized—adjustable without code.
Q3. How do you ensure loan balances match the salary register?
The loans ledger lives inside iHRMS. Opening balance + transactions = closing balance; reconciled into the register automatically.
Q4. What’s a realistic go‑live path?
Two parallel cycles to compare with your current process, then switch to steady state. Most teams settle by month 2.
Q5. What about night‑shift crossovers and rosters?
Attendance rules (night crossover, weekly offs, holidays) can be configured and feed directly into payroll.
If your payroll still feels like a monthly time bomb, let’s fix it.
Comment “Audit” or connect with us for the 10‑point Payroll Audit Checklist and a walkthrough.
Email: mkt@innovativesolutions.in
Phone: +91‑9820923196 / 8087850093
Product: iHRMS
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