Taking care of your company’s finances is one of the most important parts of running any business. Evaluating your profit and expenditure, paying your taxes on time, and making sure you’re in a position to pay your employees correctly are all imperative, and failing to do so will likely land you in hot water time and time again.
Paying your workers is essential to keeping your workforce happy and fulfilling your obligations as an employer, but tackling payroll can seem challenging to many. Here are some of the most common mistakes you’ll need to avoid if managing payroll is your responsibility:
Being inconsistent
Your employees will have bills to pay and financial obligations of their own to meet, and they’ll likely be relying on the monthly payments they receive from work to deal with these. As a general rule, you should be paying your employees on the same date every month, or a few days before the agreed date if it falls on a weekend or Bank Holiday. Being inconsistent with your payments could cause them lots of problems, leaving you with a discontented workforce and a reputation for unreliability.
Over or underpaying your employees
Miscalculating how much you owe your employees from month to month will cause a whole number of problems, many of which require a lengthy process to resolve. If you underpay your employees, you’ll need to react quickly to make sure you don’t have to deal with complaints or grievances later on down the line. On the other hand, if you overpay your employees, you may end up losing money – especially if the problem isn’t flagged up by your employee or noted by your financial department. Additionally, if the employee in question doesn’t agree to pay back the extra money, you may have to seek legal assistance.
Leaking private information
Your employees’ financial information must be kept confidential at all times, so you’ll need to make sure this is properly protected. In order to run a happy company, your employees must be able to trust you and rely on the fact that you’re keeping their personal information safe and secure. From maternity payouts to childcare support, there are some things that your employees may not want to share, so you’ll need to make sure you have strong confidentiality measures in place when dealing with payroll.
Not keeping up to date with payroll changes
Staying up to date with all payroll-related legislation and regulations is essential for every business. Failing to comply with the law could see you run into trouble with the government, which is something that no company wants to deal with. Additionally, failing to stay up to date with tax changes and other amendments is likely to waste time in the long run. You’ll have to spend more time identifying and fixing errors than you would by simply updating your payroll in the first place.
Payroll mistakes, even those which may appear to be minor, can cause a lot of problems to both small and large businesses. To minimise the risk of errors from occurring, consider investing in payroll services from a chartered accountancy business, such as Barron & Co Ltd. Based in Birmingham, we provide top quality payroll services to businesses in the local area, helping them to save money and develop a trusted relationship with their employees.
For more information about our accountancy services at Barron & Co Ltd,
please don’t hesitate to get in touch today.