Save Your SME Money With A Good Payroll Management System
Not only does an efficient payroll system enhance staff morale and boosts your reputation, it can also save your business significant costs.
Payroll solutions are designed to help hone the strategic focus of your business' HR department, by shifting HR and payroll managers' from paperwork to developing and motivating employees.
"The biggest potential saving comes from full compliance with tax and labour laws and regulations," says Ania Strydom, Compliance Specialist at Sage. "Avoiding the massive costs of fines, interest and penalties that a company risks if it doesn't comply."
Here are her tips for conducting payroll, saving money on a good system, and pitfalls to avoid that most SMEs don't see coming:
Choosing a viable payroll management solution
- Look for a scalable product that can grow alongside the business
- Find a solution with full local support that is kept up to date with relevant labour and tax laws for the markets where the business operates
- Make sure the vendor has a proven track record and local reference sites
- Ensure that the solution is built on flexible modern technology that accommodates today's trends — mobility and the cloud, for example
- Consider a solution with integrated employee self-service functionality.
Vital considerations when conducting payroll
- Ensure that the payroll department consists of people with a good knowledge of payroll and the required skills set to ensure success and compliance with payroll
- Instil a payroll environment that does not need regular review
- Conduct regular payroll compliance audits to ensure compliance minimises the risk of exposure.
How a good payroll management system actually save you money
- Using automated payroll software with employee self-service functions can help organisations save time as it diminishes the need for manual data capture, calculations, reporting or returns
- Rest easy knowing that automation reduces the possibility of human error, allowing businesses to focus on strategy, customers, and employee engagement rather than on red tape
- Payroll can help businesses understand how employees are contributing to profitability, what resources are needed, the cost for major projects, and identifying gaps or surpluses in their human capacity
- The risks of payroll fraud and incorrect payments are reduced by giving managers better visibility into transactions, providing an audit trail, and providing a set of controls, checks and balances
- The biggest potential saving comes from full compliance with tax and labour laws and regulations – avoiding the massive costs of fines, interest and penalties that a company risks if it doesn't comply.
Avoid payroll errors SMEs typically make
- The use of manual solutions due to tight budgets. They should instead, look at affordable, cloud-based solutions that are priced per payslip per month instead
- Failing to enforce separation of duties. Different people should have responsibility for capturing payroll data and for managing access to the system as well as adding and removing employees from the payroll. Another person checking that the numbers add up could reduce risks of fraud and error
- Not keeping abreast of changes to tax and labour laws such as the Employment Tax Incentive.