An often overlooked aspect of employee management is the right payroll solution, payroll problems can mean more than disgruntled employees. It might end up creating legal issues, a position most companies should try to actively avoid. HR departments caution companies to read up on the risks before signing on to a new solution or service.

Pay-run reminders need not feel like a dash towards a deadline that evokes stress due to all the follow-up calls, emails and reports reviews. Unless streamlined a disparate process just creates more errors.

New joiners, leavers, Holiday calculations, tax codes and changing legislation can make payroll a long and complicated process, the thought alone can tire one out.

Paying employees accurately, on time, every time is not just a legal requirement, but also an ethical and professional function of any reputable business. As companies expect employees to turn up and work, they expect to get paid on time. This agreement forms the foundation of all employment relationships. And if payroll goes wrong, it can cause all sorts of problems.

We see many small and medium companies struggle to meet the payroll deadline, even with companies that outsource their payroll, without a mature payroll partner, corrections and adjustment errors do creep in.

It is important that companies choose payroll service providers who either use a proven solution to process their payroll or own their own proprietary solutions which are of repute.

Every miscalculated payment creates more constraints in resource time rectifying this error, and in some rare cases, back payments and fines might also mean a disturbance that the finance team has to deal with along with the HR team trying to reassure the disgruntled employee.

Withheld wages

Sometimes when an employee fails to complete work to the standard as prescribed in their contract, companies may feel justified to dock their wages, but this is a highly risky move. With the advent of Zero hour contract, temporary contract and flexible working contracts HR & Payroll professionals need to be clear in determining policies.

Failure to pay an employee’s wages that they are entitled to can be construed as an unauthorised deduction and can bring a claim against the company. Docking wages is known to be one of the major cause of employment tribunals.

Erroneous calculations

All payroll tools are not equal, customising payroll solutions as per the needs of an organization is what translates into a smoother, error-free payroll calculation every pay run. Imagine working with a tool which cannot accommodate all the intricacies and customisation of your organization, this translates to many lost hours of productivity where payroll professionals are trying to manually update or correct the payroll each pay cycle.

This can translate to underpayments or overpayments, both of these are risks an organization should avoid, take the example of the Derby Hospitals NHS Foundation Trust, the payroll software used by them did not factor in and calculate data on rest breaks for a category of employees, in this case, Junior doctors, resulting in millions of pounds of unpaid wages.

This is why we as a payroll solutions company invest a lot of our resources in ensuring that our software is accurate, updated with latest legislative requirements and that we have a quick turnaround time in updating the solution to any environmental changes.

Classification mistakes.

Since IR35 will be coming into effect next year it is important that companies understand and assign correct employment status to contractors working for the business. Labelling someone as self-employed but treating them as an employee might lead to them being underpaid, the gig-economy will be hugely impacted by this and there are plenty of high profile cases such as Uber & Deliveroo.

Why payroll is so specialised?

Payroll combines aspects of accounting, human resources, employment laws and is a specialised subject, traditional approach to payroll solution or services using an IT-based model does not deliver a fit-for-purpose solution using an off the shelf fixed design model.

Which is why we are proud to be one of the few payroll companies with comprehensive solutions that are built and managed by high calibre payroll professionals, and 80% of our employees are payroll system trained professionals.

This ensures our software, solutions and services are fit for purpose, highly modular and highly comprehensive covering all the customisations a client could require.

Since 1998 our mission has been to bring affordable, quick and accurate payroll services to a wide range of organisations.

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