Here're 4 Most Important Things You Must Know in F & F Process

Introduction- Full and final (F & F) settlement is a process, which involves mandatory procedures exercised before an employee leaves the organization. It includes all the formalities like paying the employee his / her total calculated salary until their last working day, gratuity payments, tax deductions, unused leaves, etc. All these parameters are checked and processed on their last working day in most of the companies.

One thing is sure that HR folks are the ones, who need to put in a good amount of efforts during such instances. Parameters mentioned above cover only a small part of the overall F&F procedure. The actual workload on their shoulders is just unimaginable, which becomes a nightmare if they lack a robust HRMS system. Whilst, choices are endless as of today like adopting an HRMS software (or Human Resource management system), which includes the F&F module as a key module. Such tools are also available at subscriptions thus, light on the pocket.

This blog will focus on four major checkpoints most of the human resources personnel often come across while processing full and final settlement. Let’s get started then.

Final Calculations

Calculating all the major payroll components is the first thing you must admit to. This includes calculating monthly inputs like LOP, PL, other earnings and deductions, gratuity, encashment, etc. All these parameters need to be taken care of before processing payroll of the respective employee for the month. While entering inputs here, watching the required tax deductions and thereby updating form 16 are also things that must be done.

Payroll Processing

After you’ve successfully processed the monthly inputs, payroll can be processed for the particular month. Configuring the required final inputs before payroll will ensure accurate payroll for the employee in question. In order to avoid errors or prevent from any critical mistake, you may adopt an HR software that includes f & f settlement as a key module. HR software is designed in such a way that it accurately calculates each parameter as per configuration and delivers the required outcome.

Employee Assets

Next comes the assets. Here, assets include employee documents such as mark sheets, address proof documents, or any other belongings collected at the beginning. Also, it includes assets belonging to the company temporarily allotted to their employees like mobile phones, laptops, etc. All these assets need to be handed over.

Process F & F

Here comes the final step of the procedure. Once you have finished with all the steps discussed above, you can now proceed with final formalities. Whereas, in the case of HRMS, only monthly inputs need to be set once the decision is taken. After entering these inputs, you can directly move on to the full and final process. It finally shows and processes the final amount to be paid. It reminds about the assets and documents as well, eliminating last moment rush.

Successfully practicing the above-mentioned procedures can help you finish the exit process swiftly without any worries and mistakes that often occur in several cases. Whilst, calculating these employee concerned components without any assistance/expert becomes one of the most mundane tasks that HR need to perform. The most challenging part is to know what all parameters need to be calculated and what documents/assets were collected or provided respectively.

Now this, when done manually, invites error at calculating the final sum. Important/vital documents may get misplaced. Therefore, it does not only affect the employee experience during an exit but also has some adverse effects on HR’s performance and accounting department.

As discussed earlier, the HRMS system is something which is a well-thought solution for your HR department to execute the exit in a smooth manner. Some of them also comprise of integrated accounting tool, which takes care of payroll thus, zeroing any error in calculations. As soon as the HR folks initiate the F and F process, the system automatically calculates all the parameters by itself and generates a detailed report of everything within a short time span. Hence, transparency is never an issue.

A robust and next-gen HRMS solution can be the most important tool for your business irrespective of the size or vertical. For size, they have basically two types of HRMS – Cloud-based (Subscription based) and on-premise (Bought one) for small scale and large scale businesses respectively.

Advice to Employees

Some standard measures need to be taken by the employees who are exiting a company. Make sure there are no dues left. If there are any pending work from your side, get it done at the earliest. Maybe before resigning! As it only extends the total procedure duration. There are several methods of reaching out to your HR in order to resign depending on the policies.

Some companies that still follow the old traditional way of working i.e. paper-based go through the lengthy process of exit, which involves verbal communications and long paperwork before leaving. Whereas, companies that work on an automated HRMS platform comprise of the short process (or maybe the shortest) involving few clicks on the portals provided to employees in the name of self-service. There are separate modules that support the initiation of F&F process.

This also notifies the employees about the dues in the company making the job easier and trouble-free for the employees and HR as well.

Dropping The Curtains

Payroll based HR software provides you with a 360-degree view of entire f & f process improving the work outcome making such cumbersome duty an easy and streamlined task for HR professionals. It ensures that every step is performed with total compliance. Also, it represents an informative and detailed report of the final amount calculated which is to be processed through payroll later.

Ritik Singh writes about HR software, cloud and enterprise technology. A dynamic content writer who writes for Pocket HRMS, a leading provider of cloud-based HR software with inbuilt AI-powered HR chatbot (smHRty) to small and mid-sized businesses across India.