Is Your Organization Guilty of Any of These Common Payroll Practice Gaps?
Paying employees correctly and on time is one of the most critical obligations of any employer. However, no matter how robust an organization’s payroll function, there are several gaps and issues that tend to appear time and time again. Here are some of the gaps our team commonly sees when we start work with a new payroll client.
There is no coverage or backup plan should the owner of Payroll Administration be unable to perform their duties.
Many organizations have no payroll continuity plan in place. You would be surprised at the number of businesses that have only one employee on staff who is capable of processing the group’s payroll. These individuals plan vacations and time off around payroll processing dates, and do whatever it takes to meet their payroll deadline. But what happens if that individual has an emergency situation or resigns unexpectedly?
It is critical to have a contingency plan that can be quickly executed should the individual responsible for processing your group’s payroll unexpectedly fall ill or leave the organization.
There is a lack of payroll process documentation.
Should you run into the scenario where your payroll manager is unable to process your organization’s payroll unexpectedly, do you have the documentation in place that will enable someone else to take over this responsibility? Documentation outlining your organization’s payroll processes and procedures serves as a basic but critical continuity tool, creating a road map to follow should the need arise.
Internal controls / checks and balances are lacking.
If payroll is completely centralized across one business group or within one employee, the ability to cross-check and validate information does not exist. Wherever possible, empower your accounting, payroll, and human resources teams to take a level of shared responsibility so that mistakes and errors are less likely to be overlook and reoccur.
The payroll technology platform is underutilized.
Payroll systems are often purchased due to the capabilities they offer, but the system the buyer is left with does not always resemble the product they thought they were signing up for at the time of sale. Take the time to work with your payroll or HRIS technology vendor to explore the full functionalities and automations your technology offers, reducing the need for manual interventions. Payroll technology platforms integrate with many other programs, removing the need for time consuming (and potentially error filled) double entry. Optimizing these products to meet their full potential can improve efficiencies and reduce human error.
Security measures meeting best practice standards are not in place.
Payroll technology platforms house extremely sensitive employee data, which when not properly safeguarded can pose a serious liability threat. Make sure your data is protected and safeguarded, bringing in your IT support teams as appropriate.
There is a disregard for the different state and local payroll practice requirements.
Each state, and even jurisdictions within the state at the local level, each have unique payroll requirements, including tax obligations. Many administering the payroll function are unaware of these requirements, which can be costly. Take the time to evaluate where your employees are located and where new state or local specific registrations need to occur. Also, ensure your teams are aware of the required pay practices in these locations as well.
Furthermore, federal, state, and local laws are constantly changing, it is critical that those managing your firm’s payroll function stay in the know and make changes accordingly.
Is your organization experiencing any of the payroll issues mentioned above? If so, we can help. Contact us at payroll@OperationsInc.com or (800) 307-5513.