Employees are any company’s most valuable and crucial resources and companies usually spend ample time in training, deploying and recruiting people for various functions. The next job is to make sure that regular salary payments are made to employees in a timely manner minus delays. Payroll is thus vital for keeping employee morale intact along with ensuring the financial stability of an organization. Payroll processing involves greater efficiency, particularly if the company has to be run successfully and penalties are to be avoided.
Should you Ignore Payroll Processing?
You can ignore payroll processing at your own risk, i.e. in case of breakdown of the payroll process, there may be unfortunate results to bear. Deadlines may be missed, employees may be unhappy, financial penalties may have to be borne and most importantly, you may suffer from a poor reputation amongst employees.
You should always look at streamlining your payroll process and look to improve its functioning. GCC Filings is your one-stop solution when it comes to company incorporation, taxation, VAT registration, return filing, auditing, accounting, payroll and more.
Major Problems faced upon Ignoring Payroll
- Salary payment delays- Salaries of employees may be delayed for small business owners owing to time constraints. For large companies, inadequate staff members may lead to the same issue. Outsourcing payroll to a specialist company is always the best solution.
- Penalties- Taxes have to be paid at particular times every year and missing them equates to late payment charges and other penalties. Automating these tasks and having checklists will help you adhere to these requirements.
- Incorrect employee payments- If information is erroneous on the payroll and HR databases, you may end up incorrectly paying employees. Payroll systems should have suitable balances and checks for ensuring minimal errors. If any issues take place, they should be instantly fixed.
- Incorrect classification of employees- In case businesses have various employee types, i.e. hourly wage employees, part-time or full time workers, contractors, freelancers and the like, they should be entered into the suitable category. These options should be there for the payroll system, inclusive of taxes and other processes.
- Hacking- Payroll processes cover personal and confidential data and a team should be there for securing the same. You should keep safeguarding company networks for preventing hackers and take backups regularly.
- Wrong payments for overtime- Overtime payments are another issue which may happen. You should have a streamlined system in place for the payroll process after verifying employee contracts.
- Collaborative accounting and payment divisions- Your payment systems should be integrated with accounting.
- Payroll fraud- Without regular maintenance and checking, fraud may not be immediately detected. Regular audits will help in keeping these at bay.
- Last-minute lapses- You should always see which paydays fall on days which are holidays. You can then arrange for earlier transfers to avoid any glitches or last minute hassles.