How to prevent a payroll slip-up

 09 Nov 2018

Confident that your payroll process is flawless and adheres to all the legal obligations? Find out what could cause a payroll mistake, that you can avoid making.

Having a company, being your own boss or having the responsibility for your own future may have been one of the reasons that drove you to start your own company. But what are your thoughts on the required processes like payroll which seem to be time-consuming, difficult to grasp or considered less important? You might not enjoy performing them but it’s a key process for every business.

The size of the company has its implication on the complexity but it’s also required for one-person companies and is commonly referred to as tedious. It is more than paying your employees on time and handing them a payslip, it involves serious legal regulations that have consequences if there’s a failure to comply. The process involves taking care of the companies and the employee's tax duties, meaning it comes with high responsibility and potential consequences if a slip-up occurs.

Understanding the law and the responsibilities:

Being aware of the responsibilities is the first step, however, if they are incorrect understood then it’s time to consider an alternative solution to processing the payroll. Many companies have previously fallen short of the requirements whereby several failed to adhere to changes in the National Minimum Wage. Therefore, it’s important to be keeping up to date with any changes which happen at the start of the financial year in April.

The key resource for individuals outside of the financial sector is the Government website. This will become a great resource with up to date information, process and a support function. A simple alternative solution which is chosen is to outsource payroll to a professional payroll provider.

Prepare more than one employee

If you’ve decided to keep your payroll in-house to see how you compare to a professional provider. Always keep more than one employee correctly trained and up to date with information. Whether an employee is ill or decides to move on from your company, you don’t want to be left in the bad situation of being unable to complete the companies payroll.

Ensure all HMRC obligations are filed

Alongside employee payments, HMRC obligations come with high consequences if incorrectly performed. Even though these may be might time-consuming and complex, there’s a plethora of support and information from online sources which can help. This will become vital if you’ve not prepared a second payroll employee or kept up to date with new regulations.

Eliminate human error

There are many common human errors which can happen when managing payroll. Even with a second individual to check the process, there will always be human error. Therefore, it’s highly recommended to utilise and familiarise yourself with a professional payroll software. Most software requires a payment which is why small businesses discover that outsourcing to a professional bureau is more cost-effective.

Maximise security

Unfortunately, managing payroll manually or in-house means a heightened risk of payroll fraud whereby processes need to be implemented to prevent issues such as identity theft or misappropriation of funds. Using a cloud-based solution will assist with maximising your security as they commonly feature advanced security measures such as two-factor authentication and encryption. This will also be expected with professional payroll software as there’s much secure information being held.

Use a professional payroll provider

Entrust a professional service by outsourcing all your payroll obligations will ensure perfect processing. These companies are highly trained with a lot of experience dealing with payroll. This option will allow for an entire process to be outsourced, providing employees or a business owner with more time to focus on business development than an internal process. In addition, the costs of outsourcing can commonly be more cost-effective than purchasing payroll software or taking on an employee.

What do we recommend?

Without trying to sound too biased but from our experience, outsourcing to a professional provider has been severely beneficial to companies, especially new or smaller businesses which need to focus on expansion. If you’re confused on what to do next or what are the options, speak to our advisors today.