02/07/2015

By Sage UK

How to mitigate the biggest payroll gripes

Payroll is often regarded as a cog within the wheel of business; a back-office process that should run like clockwork. Yet, like any business function, it’s rarely glitch-free. Payroll is complex and comes with a raft of challenges as well as legislative changes to adhere to.

Although it may not contribute directly to the bottom line, payroll is indispensable to any business. It’s something employers simply must get right.

Understanding the key challenges, pressures and gripes for any payroll representative and ensuring your organisation is properly geared to overcome them – whether you make use of an in-house or outsourced payroll solution – is vital.

At Sage, we explored the top gripes payroll representatives experience in their role and found ensuring accuracy, making sure employees are paid on time and keeping up-to-date with legislation topped the list. So how can you alleviate these payroll pressures?

Accuracy

Payroll accuracy and compliance is the goal of every payroll practitioner, but in order to improve accuracy you will need to understand the current pitfalls. For example, what are the three most common payroll errors? Why are they being made, is it poor information/data or in manual processes within the department? What actions have been, or will be, taken to minimise these in the future?

Most payroll systems provide information on the number of entries processed. These will be good indicators of pressured periods and trends, as well as particular types of entries that are more time consuming or prone to error.

Paying people on time

Failing to pay employees on time is a business disaster. Sage recently surveyed over 1,000 consumers and found that 90 per cent of people would be less likely to work for a company or apply for a job if they had a reputation for paying people late or incorrectly.

The research also revealed that being paid late or inaccurately would cause a third of employees to look for another job, proving the payroll department could be the lynchpin for talent management and employee engagement in business.

Payroll is not just about pay – it’s about people and perception.

With over half of consumers stating that being paid incorrectly would cause them to not only resent their employer but not trust them either, these findings challenge the view of payroll as a back-office process that doesn’t necessarily affect business performance.

Alleviate the potential problem of payroll wrongdoings by putting the right processes in place and bringing payroll out of the shadows and into the spotlight for business.

Keeping up with legislation

Payroll legislation is constantly changing. RTI represented the biggest change to PAYE reporting for more than half a century, whilst the introduction of auto-enrolment signifies a fundamental change to workplace pensions that has a significant bearing on the Payroll department. Software allows payroll departments to seamlessly comply with new legislation and ensure processes are automatically updated to ensure the pressure is alleviated from the payroll team.