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Payroll – Are You Getting It Right?

The core of any business lies in its payroll activities. It is extremely crucial for payroll to be punctual and accurate because it is that financial function, which drives the entire business and assists other functional areas of the business. A small delay in the payroll can trigger a negative response from the employees and make them restless enough to affect their productivity. Not only is payroll important from the business’s point of view but it is also important from the point of view of the labor laws and the regulations that revolve around the rights of the employees.

Since payroll is an integral function of any business activity that involves employees, it is also vulnerable to risks. There is a great opportunity for fraud in the payroll process and since the information is sensitive, it is at risk too. One way to go about the payroll process is through implementing a payroll audit in the organization. Here are some ways to ensure that the payroll functions are carried out successfully and effectively.

Payroll in your organization

A payroll audit begins with examining the payroll functions performed in the organization. Once the functions are defined appropriately, the payroll officer must analyze the various payment methods that are used to pay employees for instance basic pay, bonuses, commission and other fringe benefits. Simultaneously, the systems that are used to increase and set the pay of the employees must be evaluated. Moreover, payroll officers need to ensure that the accurate payroll data is conveyed to the financial management and accounts of the business so that no errors take place.

Set up the payroll

Once the above mentioned is determined the next step is to set the payroll. While the payroll functions are set up and administered, there are 4 essential factors that must be inspected. The legal implications of the payroll are one of the most significant factors to be examined while setting up the payroll. The payroll policy is also of immense importance to set up the payroll functions of a business. Another factor that must be examined is the payment process and the mode of the payment for instance bank transfer, direct debit and so on. Similar to the payment mode, the timetable for payroll processing also needs to be examined to set the payroll functions of a business.

Resourcing the payroll function

The payroll functions are not just the job of the Human Resource department. In fact, payroll demands the resources of the people of the organization, the equipment, stationary, regulations and the internal data. Payroll officers cannot work in isolation because the payroll can have drastic effects on other departments of the organization. Thus, they must consider all the emergency situations and serious problems that can arise within the organization if payments are not transferred on time.

Payroll security

Another important factor of setting up the payroll functions of any organization is the payroll security. Since this function deals with a lot of money and that too on a regular basis, its security becomes even more important. However, security does not involve cash only. It also takes into account protecting data from fraud and ensuring protection against error and fraud.

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