Each week or month, employees eagerly anticipate their paychecks in order to pay bills, loans and general living expenses. After long hard weeks at work, they look forward to the physical reward for their labor. When employees see their paychecks and feel that the figures are too small or that their vacation time or other factors are not accounted for, this is more than a hassle as it forges a foundation of distrust between employees and their employers.
Even if these mistakes were simply caused by human error or other entry problems, they can cause serious amounts of stress for certain employees and make them feel that their effort and time are not valued at their place of work. Most businesses could benefit from improving their payroll practices to not only keep their employees happy, but to avoid trouble with the IRS.
This is because payroll errors aren't just problematic for employees - they can be significantly damaging to companies as well. Around 33 percent of employers make varying degrees of payroll errors, which costs these companies billions of dollars each year in federal and state penalties, according to the IRS.
Is your company plagued by payroll errors?
What can companies do to prevent payroll errors?
Depending on the industry and size of a company, employees could be paid on varying schedules relating to part-time, full-time or other status-related factors. Though this may not cause serious problems for smaller companies, midsize to large corporations can encounter serious payroll problems through implementing varying payroll schedules for their employees.
"Minimizing pay cycles can help prevent the duplication of multiple processes so that the payroll department can operate more efficiently," Tiffany Washington, owner/founder of Washington Accounting Services, explained. "To maximize efficiency, every type of employee should be paid on the same pay schedule (weekly, bi-weekly, or monthly). This will allow the payroll department to focus on one task at a given time. Having one pay schedule to maintain instead of three is a lot easier to maintain. It will also lessen the chance for errors to be made during the payroll process."
"Employers should seriously consider investing in data automation software."
Meanwhile, no matter what level of education or year of seniority HR or payroll specialists have, all employees could use refreshing or additional training courses in best practices for quality payroll management. Even the most diligent employees can become complacent over time if they are not encouraged to do better and continue to find innovative ways to simplify their payroll practices. Holding training sessions once or twice a year and for any incoming payroll employees will keep all professionals up to date on the latest industry developments.
Companies that use multi systems or chaotic paper payroll methods are slowing down their entire operations and run a greater risk of causing serious mistakes. Employees that must heavily rely on manually entering payroll and employee data could easily mistype, input incorrect information or confuse one employee for another. This could cause employers to either not pay employees enough or even pay them far more than they should be, leading to serious payroll discrepancies over time. Going paperless and updating the current payroll system will eliminate the risk of error and keep HR and payroll professionals happy.
How can data automation software optimize payroll practices?
It is not good enough to just go paperless or update legacy payroll systems, employers should seriously consider investing in data automation software that organizes all structured, semi-structured and unstructured data. Instead of relying on risky manual data entry practices, organizations can take control of their payroll department and improve efficiency, while eliminating errors.
Companies that are looking to revolutionize their accounting departments should look no further than SiMX's Visual Data Discovery software tools and solutions. Our solutions reliably handle data from a wide variety of industries, ensuring that companies avoid costly data entry errors. Contact us today to learn more about our products and services.