What payroll red flags should you be watching out for?
Payroll is one of the most integral parts of any business, however, the process is often neglected and is only paid attention to when major problems have arisen. An article in Bamboo HR shared that “a smooth payroll process in your organization is like oxygen—when it’s there, you hardly notice it; when it’s missing, you can’t think about anything else.”
Consistently evaluating your payroll allows you to spot inefficiencies and to keep your processes up-to-date with the latest technologies and practices. How do you know when there are potential problems in your payroll process? In a recent webinar by MYOB, payroll experts shared these red flags that businesses should be watching out for:
1. Payroll Team
If it takes an entire team to handle your payroll, then it may be time to review the process and bridge some gaps. According to experts, one full-time payroll practitioner can handle 800-1000 employees as long as they are equipped with an efficient payroll software or system.
2. Email Spreadsheets
Very often, payroll processes are vulnerable to redundancies and inconsistencies in data because the information is input into spreadsheets that are manipulated by multiple people. Without one consolidated source of data, accuracy is compromised. Then, additional time and effort are needed to refine, update, and correct data.
3. Paper Forms
Similar to email spreadsheets, paper forms are also highly inefficient. Aside from the effort it takes to prepare, fill out, and collect forms, it also leads to unnecessary double encoding for payroll managers. Paper forms also jeopardize leave balances because of late or missed submissions while employee information is also at risk because the workflow is not secure.
Business leaders must also watch out for employee retention within the payroll team. A high churn rate is a cost to any business and it could mean that there are tasks within the process that are not working for payroll managers.
5. Day to run payroll
The speed of payroll depends on the process and the size of the company. For those doing it manually, these may take several days, while those doing it via payroll software or service can do it in a matter of hours. Too many additional steps within the process such as chasing incompleteness and reformatting must alert leaders to seek out payroll solutions.
Read also: Leave management – The easy solution
6. Difficult to get reports needed
With multiple sources of data, from spreadsheets to paper forms, generating reports on your current payroll can prove to be more time-consuming and difficult. An inefficient payroll process often leads to reports of little value to business leaders.