35% of the time spent in HR departments is only for payroll. In order to maximize system efficiency and prevent errors, you could follow these tips.
Make your system transparent
One of the easiest ways to prevent unnecessary waste of time, misclassification of employees, poorly paid taxes, and other common payroll issues is to create a payment policy and put it on paper. Promote it in several prominent places, and give a copy to each employee.
This policy should include:
How employees are ranked. Incorrectly classifying employees may characterize a violation of labor laws, liable to lawsuit or audit.
As wages, salaries, promotions, and increases are calculated; how the payment process works; when payroll changes will take effect; and how the company deals with its problems.
Avoid manual processes.
Are you still calculating payments by hand or in an Excel spreadsheet? The American Payroll Association estimates that mistakes from manual processes can cost 1-8% of the sheet’s value. The more you automate your payments by using a service provider or some software, the less errors will affect your pocket.
Simple accounting errors are common in manual systems. That’s because they rely on people to transcribe the hours and calculate wages. In addition, they are easy processes to be handled by employees.
Regularly audit your processes
It does not matter if you use a manual or computerized point card system, you should audit your processes at least once a year. Even automated systems can generate errors. And if they are not corrected in time, they can end up costing you. You run the risk of paying an additional employee due to math error, misclassifying an employee’s new position, or failing to change the pay of an employee who has received a raise.
Check all your documents and processes to make sure everything is working properly.
If you are using add-ons to integrate your payment software with the presence or time tracking system, make sure that all data is being transferred correctly.
Avoid Time Theft
Theft of time occurs when employees intentionally incorrectly record their hours, overstretch their breaks, spend hours on non-work-related tasks, or take advantage of friends to hit the card even when they are not present.
Implement a check-in system that automatically records employee hours from the time they enter work to the end of the journey. You can also use a biometric reader to avoid fraud.
Mandatory contributions and taxes change every year. It is important that you are always up-to-date on these processes. You can download the tax tables on the websites of the responsible institutions. If you use software to organize your payroll, make sure it automatically updates the numbers whenever there is a change.
Take a closer look at changes in government legislation and rules.
Best practices in the process of assembling a payroll are intended to avoid mistakes usually made in manual organization methods. Transferring this process to specialized software or to a third-party administrator can keep you in order. But regardless of your choice, make sure the process is as transparent as possible and audit it regularly. This way, you will not have any type of problem and will be in compliance with the current laws. Visit our blog for more information: http://www.payrollserviceaustralia.com.au