Research finds businesses can save £150k a year by avoiding payroll errors
As National Payroll Week begins, HR, Payroll and Finance experts warn businesses to be aware of the impact inefficient payroll systems can have on their business’ durability.
Recent research from MHR found that within an organisation of 500 employees, payroll errors could cost businesses up to £150,000 annually.
This is a common issue – 91% of businesses across the UK and Ireland admitting they make payroll errors every month. These are unnecessary expenses that most businesses cannot afford, especially with a potential recession hitting the UK.
More effective payroll systems improve financial wellbeing for employees
Real-time payroll systems provide businesses with an up-to-date view of their employee’s data, meaning HR, payroll and finance teams can make more informed business decisions, improve accuracy and any potential errors can be spotted and corrected before payday. The reduction in payroll errors improves employee’s financial wellbeing as data shown over a third of employees who experiences incorrect or late pay had to borrow money from family and friends, 25% struggled to pay essential bills.
How to build an effective payroll system
Outsourcing payroll can help businesses benefit from improved accuracy, providing a significant reduction in errors compared to the average in house process. Processing payroll is also time consuming, complex and can cause a headache if not done correctly. Outsourcing payroll is ideal for businesses that don’t have in-house staff to manage payroll or businesses that have limited HR staff. Outsourcing payroll ensures that you remain compliant with all laws and regulations, and it can help increase productivity within your office.
Eliminating human error with automation
Almost three-quarters of organisations still use dated manual processes for payroll, despite technology for automated and real-time payroll being available. Automation lowers the risk of human error as there are fewer manual workflows, data entries and calculations. Digital solutions to payroll also provide better accuracy and free up time for employees to carry out other tasks.
Keep policies simple
The more complex your attendance, paid time off, expense reimbursement and other policies are, the more complex your payroll process will be. Keep your policies simple and concise. Also, don’t overcomplicate policies by creating different policies for different levels of staff or create strict, detailed guidelines that will add more administrative complexity to payroll.
Adopt a self-service model
Employee self-service helps manage many HR related tasks that would usually have fallen to management or administrative staff. Employee self-service allows the staff that usually handles payroll to focus on other tasks while allowing employees to manage their personal information. Adopting a self-service model helps to streamline administration of payroll because the HR department doesn’t have to spend time updating employee information, giving them time to focus on other tasks.
Instant Payments with IGsend
Our IGsend system is perfect for businesses looking to improve their payroll payments process as it offers employees real time instant pay, avoiding the 3 day wait like with BACS.
If you want to build a more effective payroll system that supports your staff’s financial wellbeing, contact us at firstname.lastname@example.org
How were celebrating #NationalPayrollWeek
National Payroll Week 2022 (5th – 9th September) was established in the UK by the CIPP in 1998 to celebrate the payroll profession and to give it the recognition it deserves. The week is designed to demonstrate the impact the payroll industry has in the UK through the collection of income tax and National Insurance.
There is lots going on to mark National Payroll Week including webinars, social media hashtags (#KeepUKPaid) and downloadable content from the CIPP.
We’ve decorated our office with the CIPP bunting and think it looks great!
Today is day two of National Payroll Week 🎉
To celebrate we decorated our office with the @CIPP_UK bunting. 🔻🔽🔻🔽🔻
— Income Group (@income_group) September 6, 2022