How to Perfect a Business’ Payroll Process
Regardless of your businesses size, a reliable payroll system is vital to its healthy operation. Not only do flaws in a payroll system’s design lead to financial costs but they also delay a business’ progress. Errors can lead to issues with external authorities, such as HMRC, which can potentially lead to large fines or closure.
It is easy to be complacent about your own payroll. Systems are often built around a growing business, adapting to its needs as problems arise and, for some time, this may seem sufficient. However, your financial activity and payments are under constant inspection from employees who want to assure their pay is correct, as well as tax authorities, who may be less easily forgiving when finding a mistake.
So, what can you do to perfect your payroll process? Well, each business is unique and you should certainly be wary about any specific calls for certain software or processes, since they may not suit your needs. What can be recommended are practices that improve and maintain a high standard of payroll management.
Embrace Digital Foundations
Regardless of what software your business uses, there is little to no excuse for the continued use of paper documents or manual databases. Storing and managing paper-based files and manually controlling spreadsheet data are outdated practices that cost businesses money and time, while simultaneously being more likely to cause error than the automated, digital alternatives.
There is an initial cost that deters some business owners from making the transition, as can undertaking the training required to develop automated spreadsheets and formulas. However, the time and money ultimately saved, as well as the improved reliability is far more significant. As software, training, and applications become more accessible and affordable, including the ubiquitous presence of cloud databases, there’s no excuse for businesses to risk paper-based payroll methodology.
Consult the Experts
Outsourcing all or part of your payroll to a reputable company, such as People Group Services, can relieve your company from a large portion of work and stress. External payroll groups not only manage your business’ payroll with expertise but they are also constantly adapting to meet the standards of changing tax laws, such as the recent IR35 adjustments, which assures you’ll never need to worry about processes becoming outdated.
Discuss and Review
Different styles of management are appropriate for different people. However, when it comes to a significant topic for employees, it is important to consider their feedback on the operation. Employee pay is the most significant area and, when establishing or reviewing your payroll, consulting with your employees is a worthwhile endeavour. Gathering feedback should be a part of your regular payroll audit.
Reviewing documents regularly, whether as part of an audit or general practice, prevents the occurrence of many mistakes. For example, a missed invoice can lead to a fine or late delivery. Regular checks not only keep systems running smoothly but they prevent larger issues from occurring.
Ultimately, it is important to build a resilient payroll system. Not a system that responds to errors and corrects them but one that prevents errors from occurring, that can also be relied upon to recover from mistakes quickly. The strength of such a payroll system will, ultimately, be a testament to your greater business.