Streamlining Payroll Processes: Efficiency Solutions for Businesses

When people think about payroll costs, they often think it is just the hourly rate their employees are being paid. However, there is a lot more to it than that. Hidden in those costs are taxes, fees, benefits, and also the salary of the person you are paying to run your payroll. If you are considering running payroll yourself, you may want to have a real think about the time and effort that goes into it. Payroll doesn’t have to be a headache or a time-consuming process, it just needs to be streamlined in a way that works for your business. Read on to find out more.

Why Streamline Your Payroll?

By removing the complexity of your payroll, you will not only save time but also reduce the hidden costs associated with it. It may be a case of looking into how your accounting firm is managing your payroll – are you being charged each time a new employee fills out a form, for example? Or if you are managing your own payroll you may not be aware of the forms and procedures you should be implementing, and this could leave you with nasty penalties further down the line.

A complex payroll process leaves room for errors to creep in, which can end up costing a business lots of money. By streamlining this process, your payroll can be uncomplicated and smooth.

How To Streamline Your Payroll

1. Invest in payroll processing software

Software is key when it comes to removing manual errors with payroll. There are lots of different software systems out there, so take your time to research their pros and cons to allow you to pick the right one for your business. Ideally, if you can combine time tracking, employee scheduling, and payroll into one system this will help save time when it comes to creating the monthly payroll. This will also allow you to see your true labour costs in real-time so you can establish which employees are continually working the hardest to drive profit for your business.

2. Integrate payroll and benefits into one system

Employee benefits can be really hard to keep track of and are often complicated to manage. Some companies use one provider to handle their benefits, and another to manage their payroll. However, this can cause confusion if the two providers don’t communicate with each other, so mistakes can be easily made. Entering employee data into two locations also takes a lot more time.

Ideally, you should integrate your employee benefits directly into your payroll system for full transparency. This will save a lot of time when it comes to generating your annual reports too.

3. Use automated workflows

Automation is one of the best ways to save time and reduce human error (particularly when it comes to repetitive tasks). Think about how you can automate the following tasks: paying bonuses, fixing pay errors, overtime, and annual leave requests. Start by creating a flow-chart of your current processes, and then see if there are any ways you could automate tasks to ensure a smoother workflow.

4. Create checklists to reduce errors

In an ideal world, every payroll would be processed without errors, but unfortunately due to the complexity of payroll there are always going to be the odd mistakes. Whether you use automation or not, it is worth investing time in creating a checklist. This ensures that nothing is missed and mistakes are not made due to carelessness.

Creating a checklist enables you to break down your processes, and it may even highlight tasks that are being duplicated or simply aren’t necessary. Part of your checklist should include a regular audit of your payroll to ensure compliance, and this can help you pick up any errors before your end-of-year accounts are prepared.

Ask your employees to regularly check their payslips too, so if anything is missing then it can be corrected immediately and your accounts will balance. It is much easier to fix a mistake the instance it is made rather than finding out further down the line and having to sort it out then.

5. Use automated payments

Paying employees using direct debit saves an awful lot of time, and reduces the need for paper payslips too (which can be easily misplaced). If you pay employees frequently, think about running a payroll once or twice a month if possible as this will help save the business time and reduce payroll costs too.

You do need to determine a payroll schedule that works best for not only your business but your employees too. Try and ask your employees for their input rather than deciding on a payroll process that you want to abide by. They may prefer being paid weekly, for example, rather than going onto a monthly salary.

Best Practices In Payroll Management

Here are some best practices you can adhere to in order to improve the efficiency of your payroll processes:

• Create policies and procedures for the entire payroll system
• Add important dates and deadlines for payroll processing to your calendar
• Ensure your employees are classified correctly with the correct tax codes
• Revise and automate your payroll system
• Use real-time data and analysis to make informed decisions
• Create a strict payroll approval process
• Implement a strong data protection policy

If you need help streamlining your payroll processes, get in touch with the experts at Wright Vigar who are on hand to help your business.