Payroll challenges mean that it is not easy for small businesses, and even larger or more mature businesses, to get this crucial function right 100% of the time. But when mistakes in payroll are made, the amount of time taken to identify, unravel and fix underpayments or mistakes can be a huge drain on the time of that business. And that’s without going into the stress it causes employees and staff who are dealing with bills or tax obligations!
We’ve found the most common things that lead to mistakes and payroll issues and put together some practical, simple ways that you can overcome challenges in payroll processing.
One of the most common sources of payroll issues is when a new employee joins a business. Just getting the most basic details right goes a long way to making sure things are error-free when it comes to payroll time. At a minimum, payroll staff should check and re-check tax file numbers, full name, and address, and date of birth with each employee.
It’s amazing how many people will give a shortened version of their name as it appears on official documents (Matt or Ash rather than Matthew or Ashlee) or fail to provide their tax file number for a range of reasons (“I already gave it at my other job, and I don’t want to pay extra tax”). Paper forms often lead to accidental errors in other details as well.
Taking ten minutes to explain exactly what is needed and why after a new hire is made is usually well worth the time savings down the track, especially if the new starter is beginning their first job or a school student.
Payroll Tax Changes
This is a relatively simple thing to keep on top of. Tax rates and Payroll tax rates change each year. The simplest way to stay on top of changes and make sure that your systems are updated ahead of time, not afterward, is to set a calendar alert for 1 June to review any changes. That way, when 1 July and the new financial year roll around, you’ll be all set!
Regarding payroll processing, a big stumbling block for small but growing businesses is thinking that they should try and do everything themselves. As new employees, contractors, and short-term staff come and go, payroll challenges become far more likely. If staying on top of little details like payroll is distracting you from giving your business and customers the attention they deserve, then it’s well worth thinking about outsourcing some of these functions to a trusted professional.
To get the advice you need to overcome payroll challenges, or if you simply have a few questions about payroll that you think we could help with, contact the friendly team at Efficiency Partners. We are the trusted partner of dozens of local businesses providing effective, efficient payroll services so that they can focus on growing their business.