Everyone makes mistakes – we’re all human. When it comes to payroll, making a mistake can impact the business bottom line. Payroll errors have implications for employees, HMRC compliance, and if not identified in a timely manner, could cost your business thousands.
Recently, hundreds of police officers in Scotland were erroneously paid more than £40,000 in overtime wages. The error was uncovered during an internal audit and described as a “high risk” error. The officers will not have to return the over-payments, as it was determined the error was due to pandemic-related shift changes and overtime. The police chief did not want to penalise the officers for the error so there will be no docking of wages or repayment.
This is just one instance of how human error can lead to problems in your payroll process. If you can’t recoup the funds or the error is not identified for months, your business could suffer losses that can’t be recovered. For small business owners struggling to maintain payroll for their employees, any errors can jeopardise the health and future of the business.
So how can you prevent payroll errors in your business? The first step is to eliminate any manual processes. Spreadsheets are commonly used to manage payroll and most likely to be the source of errors. They depend on the person creating the spreadsheet and the data that is entered. If one formula is incorrect, the spreadsheet is useless, and the payroll calculations are wrong. The second step is to automate payroll with software that provides real0time updates to regulations and provides reporting to identify problems or errors before payroll is run. Getting rid of manual data entry each month reduces the potential for errors in the process.
Get one platform to manage your employees with customised reporting, real-time access to your payroll, and automated changes to regulations. You can direct file with HMRC and ensure compliance for your organisation. Talk to our team about our easy-to-use, integrated workforce management solutions – click here to learn more
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