How to manage payroll headaches

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Here are our payroll pain points—What are yours?

 

Every employee expects to be paid on time and many count on it. So, when things go wrong, it’s highly stressful and payroll often get the first call.

 

While dealing with employee queries is time consuming and sometimes frustrating, it’s not the only headache for a payroll team. Set out below are five other payroll pain points that people complain about along with some tips for how to resolve them.

 

 

  1. Not getting the right information from the business

Probably everyone who works in payroll experiences this. It can feel like you’re expected to be psychic but unless you get relevant information from the business on time, you can’t process it on time. I’ve seen situations where managers forget to tell payroll about a new employee or that someone changed their hours, went on special leave, or left the business altogether. If payroll doesn’t find out about these things on time, they can’t process them for the pay run and this can be very stressful for everyone—from the new employee who perhaps doesn’t get paid or is left on emergency tax for too long because the relevant paperwork was missing, to the payroll team who have to find out what went wrong so that they can fix it, and the employer could find themselves on the wrong side of Revenue for not filing the necessary information on time. So, not getting the right information from the business is probably the top headache for most payroll teams.

 

Employers need to ensure they implement a strict policy and that managers adhere to it because of the risk that payroll errors can pose to the business. If you are a GroForth client and need help to develop a policy, please contact our team for assistance.

2. Incomplete time records and approvals

This is another really common headache which can happen when managers leave payroll-related tasks until the last minute and then forget to do them altogether. Again, the best way to address this is for employers to make sure managers understand the business risks associated with neglecting payroll.

3. Calculation errors

Mistakes calculating payments to part-time employees crop up fairly frequently, particularly when a worker’s hours tend to vary from week to week. More often than not, if a manager or employee spots a mistake, it’s  at the last minute as you’re just about to do the pay run. A bigger headache, though, is when a  miscalculation goes unnoticed for several weeks because tracing the problem backwards is tedious, time-consuming and potentially very expensive especially if the business has to make good errors that went unnoticed for a prolonged period of time.

4. Misclassification of employees

This can occur in various situations including those where an employee is misclassified as a contractor. It’s very important that employers confirm the status of their employees.  If in doubt, check Revenue’s Code of Practice on Determining Employment Status.

5. Keeping up to date

Payroll operates in an evolving landscape where revised tax rates, employment law changes and new rules that affect employee pay, conditions and benefits are constantly developing. Keeping up to date can be a major headache, particularly for small businesses where the payroll team might just be one person.

 

In these situations, or indeed in other situations where you find payroll stressful or overly time consuming, it may make sense to look at outsourcing as an option that could improve efficiency, generate cost-savings and deliver peace of mind. However, before deciding to outsource there are pros and cons to consider. In a previous blog, we explained how to examine the business case for outsourcing. If this is something that you are considering, please get in touch. We’d love to hear from you.

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