5 payroll management mistakes that will waste your money

HR Insight

Whether you’re a newbie or specialist, payroll management is still a minefield where every single false step is costly. The list is long, but here are the top 5 that always need your attention.

Payroll management is the least appreciated yet among the most crucial factors to keep your employees satisfied and your business on track. It’s also such a complicated process that every detail must be correct. One mistake can cause a ripple effect across your entire business.

You don’t want to mess things up, right?

Remember to watch for these typical mistakes in payroll management, and make sure you always stay away from them:

Make human errors

For small businesses with fewer headcounts, invest in payroll software or outsourcing service seems to be out of the league. Instead, they prefer doing payroll in-house, and sometimes, manually. So now the HR staff must deal with all the paperwork burden.

And as we’re human, we all make mistakes. While working with numbers and numbers, anyone can unintentionally enter 30 instead of 3 overtime hours. A zero now costs you 10 times billable, and a sequence of unnecessary processes to fix this typo.

Fail to store payroll documents

Adecco - payroll management mistakes

If you want to organize payroll records rationally, sure you’ll need to spend plenty of time, resources, and efforts. Some profit-oriented entrepreneurs simply neglect this non-revenue generating function. They don’t follow any consistent procedures or don’t keep documents in a central location.

Later, it takes forever to find tax records from previous years. And just imagine how things get worse when the audits come. Now, any audit deficiencies can lead to heavy penalties, erode profit, and damage the company image.

Track employee attendance incorrectly

How are you tracking your employee attendance? Are you using swipe cards, fingerprints, GPS tracking apps, or retinal scanners? Or are you still stick with the classic - regular Excel spreadsheets and papers?

Classic isn’t always a good move. Manually tracking often fail due to various absence types – annual, birthday, personal, sick days, or public holidays. As we’re resetting normal, remote work becomes more universal and tracking employee attendance even trickier.

It’s also too easy to lose track if employees take unauthorized leaves, then they get more time off than they deserve. Conversely, they might lose their days due to wrong records. Whatever happens, work productivity is bruised.

Ignore deadlines

payroll management mistakes - miss deadline

Since COVID-19 takes a swipe globally, HR professionals become much more work-rich and time-poor. We know you have strained every nerve to keep the productivity and engagement during the quarantine and are now struggling to bounce back.

With a full plate, sometimes you might run out of time and rush through the manual payroll calculations, then likely to land up with late payment or mistakes with the numbers. Employees never happy with late paydays, and you must spend extra time putting things right. With tax deadlines, your delay will cost you a fortune for late fees, not to speak of further legal troubles.

Misclassify employees

Businesses can utilize different types of staff to optimize their operations. For example, permanent employees for key personnel positions. Interns for support roles. Temporary staff to cover maternity leaves. Freelancers or contractors for one-time projects.

The problem is, the presence of various staff categories requires more works to label them correctly. Labor contracts, minimum wage, insurances, taxes, compensations, etc. are all different among each of them. With numerous new hires in peak seasons, everyone can slip up and make some glitches in payroll management.

This is not the end

Bad news - there’re still dozens of mistakes that we didn’t bring up here. Spotting the errors and optimizing payroll management is a never-ending story. People come and go. Business scale up and down. Labor laws are changed and updated, and reformed. And HR staff should always be able to roll with the punches.

Seem too overwhelmed right?

So, let us step in! We have customized solutions to your needs, and seasoned payroll experts to process everything properly. We can offer more than just payroll service – almost everything you need to manage your workforce effectively. We’ve worked with clients across industries and business sizes, and they’re all telling good things about us – just take a look!

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