When it comes to payroll best practices, there are a lot of obvious dos and don’ts that you want to make sure you are adhering to or make sure you are avoiding. When you are not the one physically processing payroll, it can be hard to maintain a clear line of sight to avoid errors and stick to best practice. Growing teams need structure and a balanced process to help maintain the crucial payroll function for any business. If you are looking for payroll best practices and tips for your growing team, then consider these helpful hints.
1. Unnecessary effort
The payroll function of any business is critical to avoiding potentially damaging errors, which result in excess liability for the business. Best practice payroll processes encourage avoiding any unnecessary effort wherever possible. Using software solutions to automate processes helps avoid unwanted data errors stemming from double handling or crossover between staff. Government tax regulations now state that end of financial year payroll data must be provided directly to employees to help streamline return processes. This best practice approach is a great opportunity to look for additional opportunities to automate payroll functions.
2. Employee categories
A common mistake for a lot of payroll departments and businesses is employees being incorrectly categorised, or not categorised at all. Depending on the employment status of a staff member, different tax implications can be enforced. Pay close attention to any EBA agreements or National Awards that are applicable to your organisation. Payroll best practices include auditing all employee categories and ensuring those whose status is either missing or incorrect is updated with immediate effect. Set precedence in your payroll function that this must be adhered, no matter what the size of your team becomes.
Managing a payroll function is a busy and demanding position, so if your memory isn’t as strong as your accounting skills, consider setting up key reminders for crucial dates. Key dates can creep up through the course of a working week, month or year. Best practice payroll teams have a clearly defined system of reminders to ensure no key dates are missed. This is very important if you are working to an alternate or overseas taxation calendar year as many professionals are.
4. Forms and structure
One of the most frequent errors or issues experienced in any payroll function is missing information. This is especially true for onboarding new starters to the business. Best practice payroll functions save time and errors by implementing a detailed system of payroll, superannuation and taxation forms. Every new starter completes these forms electronically and the information is automatically relayed to the payroll teams. This best practice approach helps to avoid transcription errors or missing scans.
5. Archiving and records
Payroll would be nothing without a clear, accurate and safe set of archives and records. Best practice payroll teams set out clear structures for classifying, storing and maintaining accurate financial records. The best way to achieve this is through payroll software or payroll solutions. The market abounds with options to integrate with existing processes and data. Suffice to say, if you are still using filing cabinets your payroll function is behind in best practice.
6. A close eye on payroll best practices
Payroll employees often cannot see the woods through the trees. When you work in a payroll function every day for the same business, it can be hard to spot inefficiencies or issues. Best practice payroll teams use detailed audits from both internal and external suppliers to help ensure they are on top of any potential issues or gaps. If your team is growing, you will want to make sure you have the software and resources in place to safeguard this issue.
7. Training and development
No payroll team would be adhering to best practice if they allowed their skills and experience to age without refreshers. Best practice payroll teams seek to identify gaps in their skill sets and then send employees to training courses or workshops to help hone and bring back shareable learnings for the entire team. Investing in the skills and experience of your payroll team, especially when it is growing is critical for success.
The payroll function is crucial to any business and maintaining best practice processes is even more critical to overall success. To help maintain best practice in your growing team, outsource this critical function to a payroll services professional. This ensures absolute compliance, accuracy and peace of mind for your growing business.