How to avoid costly payroll errors? Payroll errors and mistakes are unfortunately common but fortunately preventable.
The reality is that you can avoid most payroll errors. It may require extra vigilance and choosing smarter solutions, but you’ll save your precious time and money.
Only 1 wrong digit in payroll calculation can result in disastrous consequences. Therefore, it’s worth getting your payday right.
In this article* you’ll learn about:
*The information, data and guidance provided in this article is for general information purposes only and does not constitute professional or legal advice.
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In today’s business world, It’s much easier to make payroll errors and mistakes than ever before. We’re increasingly dealing with complex payroll transfers, especially in fast-growing startups and in the gig economy sector (a.k.a. digital platform work).
Here are the most common payroll errors companies make:
For more detailed information about the 8 payroll mistakes, check out our article: “The 8 Biggest Payroll Errors Most Employers Make”.
Most payroll mistakes result from poor payroll processes, such as entering data into payroll software, calculating wages, processing payroll taxes, etc.
The bottom line: no company is immune to payroll mistakes/errors, but all companies can, and should, minimize their number. After all, wasted time in HR has a long-term impact on your company’s profitability, especially when retaining employees is challenging.
Your HR should focus on what counts: your employees, not solving errors. HR should focus on building a happier workplace where “employee turnover” sounds like a foreign word.
Ready to take your HR strategy and business to the next level? Plan 2023 with this HR Calendar and improve employee retention!
Read on to learn how to solve and prevent the most common payroll mistakes.
In today’s dynamic workplace reality, it pays to avoid outdated HR and payroll systems and instead choose accurate, flexible, and adaptable solutions. This is even more important when your business and workforce are growing.
Here are some actionable recommendations to help you avoid payroll errors and mistakes.
Make sure your payroll process works smoothly, and your system is flexible. Don’t risk forgetting to meet important deadlines or to send forms on time. Most payroll solutions have alarms and reminders to help you avoid missing important details.
Additionally, go through and spring-clean your existing records. Use a proven system to gather all the relevant details about your employees.
Use a payroll effectiveness & efficiency checklist to identify any potential glitches.
Finally, to reduce manual work and paperwork in HR, consider creating a payroll master file for automation. It will free up time for strategic HR activities and boosting employee engagement.
Ensure your payroll admin has all the necessary information and data to handle the payroll process properly.
Here are some recommendations:
Additionally, make sure you reduce manual payroll processes to a minimum.
Does it make sense to use your HR team’s time on manual data entry, salary calculations in Excel spreadsheets, correcting payroll errors, and dealing with high employee turnover? Is it a good idea to give up the benefits of the innovative technologies of the 21st century? Can your company afford (more) problems with payroll? You probably know the answers to those questions.
Anna Jagiello, Digital Product Expert
The right HR and payroll software will help you:
If any payroll problems/errors occur, resolve the issues immediately. If necessary, report them to relevant entities. Correct errors promptly to minimize employee dissatisfaction and avoid penalties.
In the case of minor payroll errors, you can usually do one of the following:
To prevent payroll errors:
With the right payroll software, payroll teams can identify problems that may negatively impact the payroll cycle’s completion. This way, they can solve them before the payroll is run.
Payroll software helps to:
Low-performing organizations can take around 5-10 days to resolve a payroll error (APQC). But why take your precious time to resolve payroll errors instead of preventing them from happening in the first place?
If you have access to payroll software, run a few key reports before processing payroll. This will help you catch and prevent mistakes.
Consider running the following reports:
Additionally, to prevent payroll errors:
Do your best to spot payroll errors before they happen. Using human eyes alone for this may be too risky.
Payroll and HR need better data for better decisions. Unfortunately, HR departments have lagged behind in this regard.
According to the study by Capita Resourcing:
Luckily, AI and automation can help with a big data gap in HR, starting at the onboarding stage.
AI can help HR professionals analyze key data and identify trends as well as pain points. This way, issues can be addressed proactively. For instance, high resignation rates among employees from particular departments or pay grades can highlight the areas that need particular focus.
There is a strong link between payroll and HR. Together, they can gain an excellent collective understanding of their employees and what makes them want to stay or leave (whether pay-related or not).
Payroll and HR can take co-ordinated steps to improve employee satisfaction and retention.
Finally, many employers understand the benefits of AI and automation in HR. But often, they don’t know which software to choose or how to implement it. Locating the right payroll partner requires some legwork and due diligence. But it’s worth the effort: it saves lots of time, money, and hassle long-term.
Today’s complex payroll cases require flexible systems and technology capable of handling multiple variables and processing the fast-changing payroll data.
Nowadays flexibility is critical. It’s a top factor that could prevent employees from leaving an employer. Thus, many employers cite flexible workplaces as their top retention strategy. They’ve started experimenting with different solutions to address labor shortages.
For example, to make jobs more appealing, some retailers offered to pay store workers daily rather than weekly. To provide flexible pay like that, a flexible payroll system is a must.
Many employees want their salaries on demand. Paying your employees once per month is outdated and can negatively impact employee retention.
That’s why, for better talent attraction and retention as well as keeping business costs down, businesses need a modern and flexible payroll system.
Furthermore, flexibility is required when companies expand globally and hire remote employees. Keeping track of the latest employment regulations, taxes, and policy changes in various countries is essential. Otherwise, non-compliance or incorrect filing can result in fines and penalties.
Therefore, you need a smart and flexible system to ensure you stay compliant in non-standard situations and at all times.
Such a system will also help you avoid messaging your payroll provider to ensure they have up-to-date and correct payroll data. Avoid this inefficient process with a tool that can instantly detect incorrect data.
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Payday is directly related to profitability and the success of your business. For example, many employees will start looking for another job after experiencing only 2 payroll errors. Unfortunately, replacing every employee who leaves is costly.
That’s why you must pay your staff correctly and on time, every time. You must manage your payroll in a smooth, smart, and fair way.
Paydays are much more than financial tasks and bank transfers. Paydays:
Payroll errors cost companies money and time and lead to employee dissatisfaction. It’s in your interest that your employees are satisfied with what they’re paid and how they’re paid.
The Great Resignation is a shortcut for the historical quit rate happening on the job market as a result of the coronavirus pandemic. Even though we’re living during the economic downturn and high inflation, employees continue to leave their jobs.
The pandemic has reshaped many employees’ priorities. Today employees value:
Compensation is still at the top. But like never before, employees value work-life balance, flexible schedules, advancement potential, and the ability to work remotely.
Furthermore, according to Gallup estimates, disengagement among employees costs US businesses around $500 billion annually.
Therefore, make sure your staff is:
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Finally, avoid wasting time on manual, repetitive work and processes that tools can do. Thus, payroll has a critical role in employee retention as an area where you can automate unnecessary work. The right HR & payroll provider will help you achieve that.
Plenty of business owners still use spreadsheets to manage their payroll manually. But there’s an alternative to this outdated and inefficient practice.
Creating a payroll master file for automation will help you:
Make time for the things that count. Think about how you can automate repetitive tasks and prevent payroll errors so you can be there for your employees when they need you.
Symmetrical offers easy, automated payroll services with the support of a dedicated team of payroll experts to help you:
Do your best to avoid or, ideally, prevent payroll mistakes. Automation may be your safest bet in today’s complex payroll world.
Automated payroll services will help you:
Invest now in improving your payroll processes so your company doesn’t pay for it later.
Ready to take your payroll (and business) to the next level? Learn more!
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