6 Practices Your Business Should Adopt for Better Payroll Management

There’s no overstating how important effective payroll management is when it comes to the smooth operation of a business, no matter the nature or size. The payroll system is responsible for ensuring that employees are paid accurately and on time, and payroll management typically involves administering employee payment processes like salary disbursements, tax withholdings, and benefits distribution. Payroll management also plays a role in a company’s financial stability, as it helps minimise errors in payroll calculations and prevents fraudulent activities.

Other benefits of proper payroll management include good financial housekeeping on the company's part, particularly when it comes to recording financial statements and making sure that these accurately reflect the company’s payroll expenses. Good payroll practices also ultimately mean that companies remain compliant with local laws and accounting standards.

Given how technical payroll management is and how many factors go into its successful execution, it’s not out of the ordinary for companies to enlist the help of hired accountants to ensure the former’s payroll records are in order. In Central Otago, for example, accountants Dunedin organisations trust will also examine payrolls and see that these are managed in line with local regulations.

If, as an entrepreneur based in New Zealand, you’re looking for ways to improve your payroll management, consider partnering with a reputable accounting firm like Target Accounting and rolling out the following practices:

1. Maintain More Accurate Payroll Records

In payroll management, accurate record-keeping is essential. Both you and your staff members must understand what’s included in your company’s payroll expenses. On your part, improving the accuracy of your payroll records means keeping updated and comprehensive records of your employee information, payroll transactions, tax filings, and leave balances. You can keep the data in the form of physical or digital records; just make sure your records are all secure and easily accessible in case they’re needed for audits and reviews.

If you prefer digital records, consider using a centralised digital system for record-keeping. It can enhance accessibility for your human resources (HR) and accounting staff and reduce the likelihood of errors associated with manual record maintenance.

2. Schedule Important Payroll Processing Dates and Deadlines

Timely processing is just as important as accuracy in payroll management, and you should make it your goal to avoid any delays or errors in salary disbursements. Be conscientious about setting and communicating payroll dates and deadlines. It’s also a good idea to use tools such as payroll calendars and scheduling software to effectively manage important payroll processing dates.

In addition, set regular reminders and notifications to ensure that all stakeholders from your accounting, finance, and HR team are aware of your upcoming payroll deadlines. This will reduce your risk of missed payments or late filings.

When scheduling key payroll processing dates and deadlines, make sure to account for public holidays and other events that may affect payroll schedules. This way, your employees can expect to be paid on time regardless of these factors.

3. Automate Payroll Processing

You should also make it an ongoing goal to automate some or all components of your payroll system. This will make it much easier to handle calculations and tax deductions, and as a result, generate payslips with minimal manual intervention. More businesses have found out for themselves that automated payroll systems help reduce human error and save time on payroll processes, as well as ensure full compliance with local laws.

When looking for payroll software options, make sure to choose one that caters to your business’s workforce size. It’s also best to prioritise payroll software with automated tax calculations, direct bank transfers, and comprehensive reporting tools. These features will make your payroll processing more efficient and accurate. Lastly, consider systems that can be integrated with your accounting software to further streamline your financial management and reduce the risk of discrepancies.

4. Review and Update Your Payroll Policies Regularly

A clear and up-to-date payroll policy is also fundamental to overseeing your payroll management. That said, make sure to review your business’s payroll policies regularly to ensure they’re aligned with current laws and organisational practices. These policies should cover areas such as payroll processing schedules, overtime calculations, and leave entitlements.

Once you’ve updated the policies, communicate the changes to all of your employees to guarantee understanding and compliance. This can be done through staff meetings, internal newsletters, an updated version of your employee handbook, or a mix of the three

5. Train Your Payroll Staff

It would also be good to invest in the training of your payroll staff, especially if you have a large company with lots of different positions in your workforce hierarchy. You should do this especially when there are changes in your payroll policies. Proper training ensures that employees will fully understand and adhere to the updated procedures.

When training your payroll staff, consider investing in training programs and certifications that can enhance their skills and expertise. Ideally, these trainings should improve their knowledge about the latest software, laws, and best practices in payroll management.

6. Consider Outsourcing Your Payroll Functions

If you hail from a small- or medium-sized enterprise, it may be beneficial for you to outsource your payroll functions to professional service providers. Outsourcing can be more cost-effective in terms of labour; it could help your business staff connect with payroll experts and allow you to take advantage of advanced payroll technologies without the need for in-house investment.

This means that you can focus your energy and resources on core activities while making sure that your payroll is managed efficiently and compliantly. Note as well that outsourced providers often have the latest security measures in place to protect sensitive payroll data, which could reduce your company’s risk of being at the mercy of data breaches.

Make effective payroll management one of your priorities if you want to improve upon your company’s operational efficiency and spearhead a positive work environment that the most talented and diligent employees won’t want to leave. For advice on accounting software and HR services, as well as international client services and exhaustive business advisory, reach out to the people at Target Accounting now.