L-R Lesley Sutton, Jennifer Davies and Karen Borowski
Jennifer Davies, director at Revell Ward, shares her top ten tips for how to process your payroll as efficiently as possible.
Every year, payroll contributes over £4bn to the economy collected through tax and National Insurance. But for many small to medium sized businesses, processing payroll can be a major pain and a drain on your time; especially if it goes wrong! So, what can you do to ensure it doesn’t become a chore?
First off, be strict on your cut-off point: Most sizeable payroll items will be known about well in advance of you processing the payroll run. If people in your business are regularly asking you to adjust your pay run at the last minute for relatively minor things, it’s time to toughen up and learn to say no! Or more politely, “I’m sorry, the payroll cut-off was yesterday so this item will appear on next month’s payroll”!
Second thing; standardise your calculations: Ensuring you’ve got a standardised way of calculating items such as how much salary to pay to starters and leavers part way through a month, or holiday pay for leavers, will save time on debating the most appropriate way. Stick to the calculation!
Keep your data clean and consistent: This is especially important following the recent introduction of the GDPR, but let’s be honest – it’s always been important for payroll. Correcting an incorrect piece of data takes a few seconds, whereas leaving it wrong and working around the error every pay period adds time to the process, draining your time over and over again.
Technology is your friend: Stay ahead of what payroll tech is out there that can make the job easier by reading articles, speaking to other payrollers, or asking your accountant. They should be able to advise you. It’s all-too-easy to be left holding a quill pen only to look up one day and notice that everyone else is in the cloud!
Get it all done in one go: We all know from bitter experience that the most efficient way to complete a task is to have one straight run at it, right? Make sure you allocate a time slot for processing your payroll, and don’t be tempted to start a few days early! Starting before your information cut-off date will set you up to go over the same ground twice or more.
Have a simple but effective procedure for every situation: This is close to my heart as I love the way systems can save a business so much time and avoid costly mistakes. Simply put, you don’t want to sit down at the drawing board each time a new problem comes along. Systems notes allow you to benefit from what was learned last time and help you avoid that déjà vu feeling of repeating the same mistakes twice.
Is your payroll software actually doing the job? If you’re a small business running your own payroll, it can be tempting to go for the cheapest software option – they’re all the same, right? Wrong. Consider the various small things that the software doesn’t cope with that are eating up your time, and of course consider outsourcing if you want to avoid all software costs, upgrades and bugs.
Keep up to date with legislation: Payroll has changed lots in recent years. We now have real time reporting, autoenrollment pensions, holiday pay rulings, a new regime for correcting earlier year mistakes, and payrolling of benefits in kind – to name just a few. Missing or messing up any one of these could be costly, embarrassing and time-consuming to put right. If in doubt, ask an expert.
Let people know if information is deteriorating: If you’re continually being sent spreadsheets with important information missing, take the opportunity to build bridges with your colleagues and explain how these things have a knock-on effect on payroll. A small change in their behaviour could save you lots of time and prevent you having to annoy them with continuous queries.
In summary, get it right first time! No-one wants to re-run reports. It’s tedious, takes time and it increases the risk of errors creeping in. Instead, invest a little extra time following up any ambiguities in the information and checking odd-looking facts and figures. If it looks wrong, it probably is! Follow the advice above and you should be on track to nailing your payroll first time, every time!
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