Small and Medium Businesses with lean operations and small teams struggle to stay on top of time-consuming payroll management processes in a fast-moving, digitally transforming society. The consequences of getting things wrong can be serious. If small business owners get the basics right from the start, running an accurate and compliant payroll can be relatively simple. Here are seven tips to remove the pain and run an efficient payroll that doesn’t distract you from your core business.
- Create a payroll calendar
Creating an annual payroll calendar at the start of the year will make it much easier and simpler for you to stay organised and further help you stay ahead of critical deadlines. Your payroll calendar should note important dates such as weekly and monthly salary payment dates, due dates for timesheets and invoices, and deadlines for payments and relevant submissions
- Enforce segregation of duties
Assigning different payroll responsibilities or a tiered approval system to different people can reduce payroll errors and the risk of payroll fraud. Various staff members should ideally be responsible for capturing payroll data, adding and removing employees and, verifying the pay run and signing off the payroll. This gives you a clear line of accountability and an audit trail. It also means fewer errors will slip through the net.
- Invest in automated software
With today’s affordable cloud technology, any business can afford payroll software for automating repetitive, low-value activities. Payroll software streamlines compliance reporting.It saves the payroll team many hours of work each month, reduces the risk of fraud and eliminates most human data capture and calculation errors.
- Keep employee records up to date
Employers are responsible for ensuring that employee personal records are accurate and up to date. This includes data such as contact details, address, banking details, salary increases, promotions and applications for maternity leave.
- Consider employee self-service
Employee self-service tools can save your payroll team loads of time. You can allow employees to retrieve payslips, apply for leave, update personal details, submit expense claims, and more via the web or a mobile app. This can spare the payroll department many hours a month they currently spend on manually updating records or processing requests from employees or managers. For SMBs seeking to become innovative people companies, self-service is also a great way to improve the employee experience.
- Educate employees
Your employees have an important role in helping the business remain compliant by keeping accurate records of expenses and overtime. You can help them help you by putting policies and procedures in place that guide documenting expenses and overtime correctly.
- Get started early
Taking the pain out of payroll is one way of improving the lives of SMB owners and employees. The best time to start implementing robust payroll systems and processes is when you onboard your first employee; the second-best time is now. Putting in place a solution that can grow with your business will offer it more visibility, flexibility and efficiency in managing its finances, operations and people.
By Yolandi Esterhuizen, Registered Tax Practitioner & Director: Product Compliance, Sage Africa & Middle East