Take a proactive approach to maintaining the integrity of your payroll data
No matter what size your business is, if you have employees, you already know that costs attached to these employees can encompass around 50% of your business expenses. You will also know that you the smallest error related to payment of your employees’ salaries could have devastating repercussions for your business and your relationship with your employees.
It is critical that your payroll run smoothly and seamlessly every time and any small oversight or error might affect the most definitive task that you as an employer, are beholden to do. Labour Law states that it is the employee’s responsibility to present themselves at work and apply their efforts to that work throughout the period for which you are paying them. If is your responsibility as the employer, to pay your employers for their time and attention to the jobs which you task them with. This is the quintessential basis of the employment relationship without which the relationship breaks down.
A payroll audit is a task that, if done proactively, could preserve the integrity of the employment relationship. Every business would benefit from a regularly auditing the many aspects which constitute your payroll.
- Check your payroll for completeness in line with the specific deadlines for each specific pay period. Employees could be salaried or waged which means that you will need to run separate payrolls for each employment type. Hours and rates will vary, and employees may clock their time and attendance biometrically, which adds another dimension to your payroll. In addition, leave calculations will differ and need to be handled differently as a result.
- Run through your responsibility matrixes to ensure the correct people are authorising certain aspects of your employee’s terms and conditions of employment. Personnel changes in your organisation, no matter how big or small you are, will affect your reporting procedures and the relevant responsibilities. An error in your reporting lines could result in personal information being exposed, which is a right against which employees are protected by law. Standard operating procedures connected with staff movements: recruitment, transfer, terminations, promotions etc. should be clearly defined to ensure the protection of privacy of employees.
- Securing your company payroll with regular audits, can protect your business from fraud. No employer expects their staff to take advantage of their trust in the workplace, but the sad reality is that people sometimes make bad choices. Always remember the saying: Who checks the checkers? Have a process in place whereby not one individual has all the authorisation when it comes to financial aspects of your business. Reasonable checks and balances will ensure the security of your finances resulting from intention or even unintentional errors, such as employee ghosting and double payments.
The result of an payroll audit will help you to identify potential weakness in the business and HR processes associated with payroll and ensure that your salary payments and related tax payments are accurate guarding against unnecessary financial loss to your business.
Pay Solutions specialise in payroll audits, speak to us today!