Running payroll is a continuous task that all organisations must engage in. In the never-ending cycle of payroll management, HR and payroll managers go through the process of calculating payroll, making necessary remittances, and disbursing salaries.
Every payroll manager knows the possible mistakes that could happen in the process of running payroll. A slight error in a spreadsheet can cascade into an expensive one. Staff might be overpaid or underpaid; deductions might be miscalculated, among many other possible errors.
These mistakes can result in financial loss, compliance issues, etc., for the company involved.
Are you looking forward to an easier and error-free payroll run all through 2021?
This payroll checklist will help.
1. Evaluate Existing Payroll Policies
The beginning of the year is the best time to determine if you will continue with the former policies or create new ones.
Decisions to make may include reviewing payment options for staff to receive their allowances, payment frequency, payroll approval process, etc.
Making these decisions will save time and remove uncertainty as you run payroll in the course of the year.
2. Verify Employees’ Information
From new staff hires, promotion of staff, and increased salaries, there are many organisational changes that can affect existing employee data.
Since employee data directly impacts payroll, it’s essential to put your house in order.
Here are some vital things to do:
Verify current employees’ data
This includes tax, other tax exemptions that may have occurred in the past year, changes in employment status, address, job title, and changes in salary structure
Complete new hires’ information
Collect all necessary data like address, full name, employment type(full-time employee or contract staff), salary structure, account information of the employees, and other benefits/commissions they will be entitled to.
3. Review Compensation & Benefits
If income for some of your employees has changed and your workforce has increased, your payroll will definitely look different than it did last year.
Now is a good time to do the following:
- Review timesheets from the previous year.
- Calculate commissions and assorted bonuses of the prior year and compare how that might change this year.
- Calculate overtime of staff (if the employee’s contract stipulates payment for overtime)
- Determine possible changes to perks and employee benefits.
- Ascertain what statutory requirements have changed and how it will affect your payroll.
- Compute the annual statutory deductions remitted, make necessary reconciliations and file the required returns with the statutory agencies so that you can get the necessary certificates.
- Determine your total payroll cost for last year. This will provide an insight into what payroll in this year might cost.
Reviewing all of these will help you make better financial projections and more efficient workforce planning as the year progresses.
4. Reassess Disbursement Process Of Salaries/Wages
How effective has your salary disbursement method been before now? If you have been experiencing recurring issues, perhaps you should add the following to your payroll checklist:
- Final review of all bank accounts of staff
- Review channels of payment: cheques, standing order for the bank, cash in hand, etc.
- Change designated payday(s).
5. Evaluate The Need For A Payroll Software
If your business has been running payroll manually, this could be the source of the many payroll errors you have been experiencing. One more thing you must consider adding to your payroll checklist is to evaluate the need to have a payroll software.
With payroll software like SeamlessPayday, you do not have to spend hours doing manual calculations and reconciliation. SeamlessPayday automatically computes all types of payroll calculations, makes direct salary deposits, remits statutory payments, and so much more.
Find out how you can automate your payroll with SeamlessPayday here.