Taking the Headache out of Paying your StaffNovember 27, 2015
As a smart business owner you strive to spend your time working on your business rather than handling all those time consuming and low value-add office administrative functions.One administrative function you are likely to find both frustrating and time consuming is payroll. It’s not that payroll isn’t important, but it is a standard procedure and one that is not core to your revenue generating business activities.
That makes payroll a perfect candidate for improvement through either 1) outsourcing, or 2) streamlining in-house payroll processes. So read on to see how it can be done!
Payroll – it’s difficult…
Even though payroll is a standard procedure, as every business manager/owner knows, there’s more to payroll than writing cheques and handing them out to employees on time.
There are all the tasks involved with:
- Keeping up to date with relevant awards, payroll legislation etc
- Maintaining accurate records
- Making additions and deductions for individual employees
- Calculating and paying payroll taxes
- Arranging bank deposits
- Handling the inevitable follow up enquiries
This all takes up time that could be better spent working on your business – improving operations or developing new ideas, new products, new ways to grow your business.
Payroll – it’s costly… (especially when you get it wrong)
Usually, the most common reason given by owners/managers for doing payroll in-house is that it is the cheapest way. Closer investigation of the real cost of payroll, along with the risk factors involved in doing it yourself, suggests that assumption is questionable. It’s likely that business owners don’t appreciate the hidden costs of doing payroll in-house. Firstly, it’s costly because it takes you away from your core business but secondly, it’s costly because it’s highly error prone and extremely time consuming.
Remaining up-to-date and compliant with changing payroll legislation is a difficult task. The complication of the current federal and state laws make it very hard for employers, even with the best of intentions, to keep up with the terms and conditions that are now mandated by law. Even a small error in calculating payroll can have major consequences and could result in you either over-paying or under-paying some, or maybe even all, of your staff:
Many businesses unwittingly get payroll wrong. Here are a few recent incidents involving payroll errors:
- Toys”R”Us were prosecuted for breaches of workplace law and had to back pay 1000 of its workers a total of $998,000.
- The operators of a Cairns insurance business had to back pay $22,000 and were fined $54,560 for underpaying two former employees.
- A Fitzroy café was fined $120,800 for underpaying two casual kitchen staff as a result of being incorrectly paid flat hourly rates.
- Cotton On had to back-pay $278,000 to 3289 underpaid employees who were not reimbursed forattending training sessions and staff meetings outside of work hours.
- A Bendigo transport company was fined $60,200 after admitting they underpaid a casual truck driver $3228 over two months.
Incidents such as these serve as a reminder that ensuring yourstaffare paid in accordance with award and/or agreement requirements is essential.
Payroll – it’s actually more than just payroll…
Whether you conduct payroll in-house or outsource it, there are important information elements that feed into the payroll process. It’s vitally important to get the information you are feeding into the payroll process right as they impact on the accuracy of your payroll. Some of these elements include:
- Times worked
- Hours worked
- Pay rates
Unfortunately, most business owners/managers don’t have the adequate time, money or resources to accurately track all of their employees’ times worked, hours worked, holiday leave, sick leave and maintain all of their employee records manually.
Staffing costs are usually the most significant cost to a business yet most organisations spend more on systems for monitoring sales and inventory than they do on monitoring and managing the greatest cost to a business – people.
Significant cost savings and benefits can be obtained from the electronic capture, recording, and processing of employee transactions. Furthermore, using systems to automate and streamline the processes that feed into payroll, to ensure the information is correct, is crucial to ensuring your payroll is accurate.
Payroll – it’s possible to make it easy…
– Streamlining In-house Payroll –
Despite the benefits of outsourcing some business managers/owners prefer to keep payroll in-house. There are systems that can be implemented that will ensure in-house payroll processes are optimised and conducted in a way that minimises frustration and error.
Some benefits of streamlining and automation of in-house payroll processes include:
- Instantly generate and email payslips to employees.
- Create the bank file to be uploaded in order to pay your staff quickly and easily.
- Calculate, store and report easily on the relevant tax payable for your staff.
- Easily calculate and pay out super payments for staff.
- Import payroll summaries into MYOB or other accounting products to streamline your monthly accounting process.
- Automatically upload the payable tax to the ATO at the end of the quarter/year, saving you time and hassle!
Even if business managers/owners decide to keep payroll in-house there are ways to improve the processes to ensure they are more effective and efficient.
– Outsourcing Payroll –
Many business owners are finding a cost effective and efficient alternative to their in-house procedure by outsourcing to a professional payroll services provider.
Outsourcing payroll has the potential to reduce costs, save time and eliminate the need to keep up with changing tax regulations allowing you to concentrate on the real value producing activities of your business.
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Want to find out more?
We have tailored solutions for improving payroll processing to save your business time and money – and eliminate the frustration and stress associated with paying your staff.
Contact us if you would like to learn more about the options available for:
- streamlining and automating the processes that occur before payroll (i.e. rostering, time collection, award interpretation etc) to ensure 100% accurate information preparation for input to payroll.
- improving your payroll processes. We have solutions for either streamlining in-house payroll processes or outsourcing your payroll.