Payroll errors aren’t usually malicious, but even innocent mistakes can cause a lot of damage. Relying on manual handling and processing can leave your business open to errors that could have been prevented.
From fragmented systems to human handling of the increased pressure of deadlines and pay-rate changes, a lot can go wrong.
As a business grows, its payroll becomes more complex, with incoming wage rises and changes to more flexible working patterns, which means the margin for error has narrowed.
Payroll directly affects your employees’ livelihoods, and so mistakes are often felt more personal.
Payroll software offers help with this in a multitude of ways and can simplify your payroll and prevent many problems that can be avoided.
Here are 4 ways a solid payroll system can help minimise payroll errors.
Automation Reduces Manual Data Entry
A reliance on manual data entry can significantly amplify the impact of human error.
Incorrectly logged hours or incorrect rates can cause significant issues, not just to the employee’s payslip but to the trust they have in the company.
The Chartered Institute of Payroll Professionals’ 2019 report found that a payroll mistake made 48% of those affected feel their employer didn’t care for their well-being.
Manual data entry can also become more complex as the number of employees increases, as different staff may have different working rates or contracts that require multiple calculations.
All of this requires the staff to make those changes without errors and to repeat this across cycles. Uncaught errors can compound over months, and fixing them can be a lengthy process, increasing the strain on HR staff.
Payroll software like Access Paycircle can automatically calculate pay based on rules that can be personalised for each staff member. These rules are then applied consistently in each cycle. This reduces reliance on manual input each month and helps keep things consistent.
This will also help flag issues early, rather than being remade every time the pay cycle is due.
Integrated Systems Prevent Data Gaps
Manual handling of the payroll can mean that multiple sources of data are split and need to be compiled and cross-referenced. This situation means that a high level of intercommunication and dependency is required.
If there is an error or a mismatch in one part of this, then it can be hard to trace and fix. Plus, for multi-team communication and transmission of data, the time taken can drastically increase, and one error is felt across multiple team members.
This system can lead to outdated employee details or mismatched hours, or key information being missed, all of which can cause issues when the payroll is processed.
Technology provides a business with interlinked systems that house employee records and have built-in timesheets and payroll handling. This ensures that changes flow automatically, in a transparent and traceable manner, reducing the need for back-and-forth and preventing version conflicts.
Built-In Checks Improve Compliance and Accuracy
Payroll compliance is a legal requirement, and any mistakes can make a business liable for unpaid taxes and National Insurance.
Having a manual system requires relying on individuals’ understanding and consistently applying the rules, without fail.
This can work, but when the time comes for legal policy changes, adding or removing staff, and editing pay structures in line with pay rises, it can put a heavy burden on the HR team to do so flawlessly. Failure to do so can lead to disputes with staff members and an investigation from the government.
Using technology can flag unusual activity or payments and can highlight missing data, helping you know what you have and what you need to change. With only minor tweaks that are applied system-wide, you can enforce pay rules automatically for those who need it.
Visibility and Self-Service Reduce Follow-Up Errors
With payroll software, employees can take a lot back into their own hands. They can view their own payslips when needed and see a comprehensive breakdown of their hours and any deductions applied.
When there is an issue, it can be identified earlier and dealt with quickly, which prevents both the employee and management from any confusion. High visibility also reduces the need for retroactive fixes and prevents repeated mistakes that could otherwise affect multiple pay cycles.
Without the technology, this would all need to be done through the HR team, who would then need to check and compile the information themselves, meaning even a small request could take a lot of valuable time.
Payroll errors undermine staff trust and morale and cost the business time and money.
Technology helps you reduce this risk and builds a culture of consistency. Efficiently using it means that your teams can focus on growth and support, rather than reacting to and dealing with issues that could have been prevented.
Payroll software is no longer just about speed; it builds your business’s accuracy and reliability when it comes to what matters to your staff.
