Payroll errors are expensive. Recent research found that payroll errors cost UK companies around £700 million in the last financial year alone. These errors not only cost companies financially but they also often put bigger pressure on payroll departments, and this increased stress often results in them making more errors. And thus, the downward spiral continues.
However, you’ll be pleased to know that there are a number of proven things that can be done to markedly reduce the number of costly payroll errors that are made.
Below we are going to cover three of the most powerful ways of reducing payroll errors for companies big and small.
A “nudge” is all about catching up with payroll staff often, especially when they are failing to complete important duties in a timely and/or accurate manner. There is the temptation to ignore small issues and mistakes and leave the payroll department to their own devices. This is dangerous however, as a lot of small issues and mistakes often lead to bigger problems and increase the likelihood of a huge, critical mistake being made.
Catching up with the payroll department often and gently pointing out mistakes, errors and missed deadlines makes them acutely aware of the issues and makes it apparent to them that current issues need to be addressed urgently and the number of future issues need to be greatly minimised. So basically, nudging them in the right direction.
So, instead of ignoring the errors, mistakes and missed deadlines for long periods of time and then having one big bust up with payroll when it all gets too much (a push), catch up with payroll regularly and slowly nudge them to get the desired result without any of the nastiness that would come from the former.
2. Conduct A Complete Audit
As we mentioned above, catching up with your payroll staff regularly, and gently pointing out their mistakes, errors, and/or missed deadlines often goes a long way in having current problems addressed as well as preventing future payroll errors from occurring.
But sometimes, frequent errors, mistakes and missed deadlines are largely a result of something bigger and more systemic and in this case regular nudges are not what is needed, and a complete audit would be more effective.
A complete audit will often include a deep assessment of current payroll and HR practices, processes and software systems to identify weak links and elements that are outdated, inaccurate or lack robustness. This birds eye view of systems and processes is often what’s needed to identify the big problems that could be causing both payroll errors and fraud.
So, if you start regular nudging and this still doesn’t result in any noticeable reduction of payroll errors then a full audit is what is likely needed.
3. Outsource To Experienced Payroll Professionals
One of the most effective ways of reducing payroll errors is by outsourcing a portion of, or all of your payroll to a highly skilled, experienced payroll agency like CPS. We’ve been handling payroll for SMB’s all the way up to large companies for many years and between us have decades of UK payroll experience.
We live and breathe payroll and have the most up to date, most sophisticated systems in place to ensure payroll for our clients is completed in a timely manner and to the highest level of accuracy, every time.
More and more UK companies, large and small, are finding outsourcing payroll is the best and most cost-effective way of dramatically reducing, and in most cases, completely eliminating payroll errors and we’re one of the main UK companies leading that charge. So, get in touch today, for a quick chat, and see how we can help.