Four Common Payroll Problems (And How To Fix Them)

Four Common Payroll Problems (And How To Fix Them)Most employees rely on a regular and correct pay cheque, which makes payroll one of those expenses that must get processed on time come rain or shine. Even the most basic of payroll mistakes can cost your business time, money and can even result in personal penalties for the business owner, so it’s really important that your processes are well established and run smoothly at all times. Sadly, many businesses make mistakes with their payroll, particularly in the beginning and most of them are completely avoidable. Here we’ve focused on the four most common payroll problems small to medium sized businesses encounter and provided some easy ways to fix them.

Using Inexperienced Staff For Payroll

Some employers or HR departments may consider running payroll a chore and therefore delegate it to the least experienced employee as ‘grunt work’. The problem with using inexperienced staff is that they are more likely to be unfamiliar with processes and filing requirements and therefore, make mistakes which results in more work for your business in the long run. While everyone has to start somewhere, make sure the staff running your payroll have been adequately trained and a more experienced staff member checks their work thoroughly in the beginning. You should also make sure that more than one person is trained to run payroll for your business, so that you are not left in the lurch in case of an emergency.

Overtime Inaccuracies

Navigating overtime pay requires a series of very complex calculations, including regular rate of pay, overtime rate of pay and the amount of overtime pay due, making its calculation one of the biggest challenges facing your payroll team. Overtime hours are defined as ‘all hours worked above regular time’. These are then calculated separately from the standard work hours for each week (or month) without averaging – only the actual hours worked may be counted. With the rise of mobile working it has become even more challenging to accurately calculate overtime hours, as mobile workers have no way of ‘clocking in’ and accurately reporting overtime hours. Ensuring accurate records are being kept by employees and managers for all hours worked as standard and as overtime, along with having them signed off by both parties before processing, means your payroll team will be able to more effectively calculate overtime pay accurately every time and avoid pay disputes.

Staying Up To Date

For many business payroll is an undervalued administrative role, often thought of as more of a burden than a help. This is partly because the payroll and business environment is constantly changing. Whoever is in charge of payroll at your business therefore needs to be able to stay constantly up to date with changes in technology, legislations, work habits and environmental initiatives. All of these factors can affect payroll and its processes. In order to remain competitive and successful, your business and your payroll need to be ready and willing to embrace change. Enrolling on regular refresher training courses and subscribing to the latest industry news will help keep your payroll staff ahead of the curve and ready for what’s coming next. If this proves too costly or difficult to maintain, you may want to consider outsourcing your payroll requirements to a specialist who will ensure everything is kept up to date on your behalf and runs smoothly at all times.

Doing Payroll Manually

While you may be a small business, with just a few employees, it might be easier for you to do your payroll manually each month. While this might be a workable solution for a while, it is not easily scalable. As your business grows and you add more employees it will become much more difficult to manage your payroll need manually. Not only will it require significant time investment but it is also much easier for mistakes to creep in if processes are being manually followed each month. By establishing an automated solution, you remove the human error factor and this also allows your employees to spend their time doing more pressing work.

At eBOS we specialise in taking on outsourced payroll departments for any size of business. Our cloud based back office solution is unrivalled in terms of performance and usability and is delivered by knowledgeable and trusted experts with a personal touch. For more information about how outsourcing your payroll could help your business, get in touch for your free consultation.