When you're running a very small business with just a couple of employees, processing the payroll is fairly simple – you have a modest amount of revenue, and you divvy up the pie so that everyone gets a slice. But the larger your organisation grows, the more challenging it becomes to compensate your employees effectively (and legally) each pay cycle.
You've got a lot of employees demanding to be paid, and there are a lot of rules and regulations you have to pay attention to.
You'll quickly discover that with a bigger company, there are challenges that pop up. You've got a lot of employees demanding to be paid, and often, there are a lot of rules and regulations you have to pay attention to. You have to make sure every paycheck is accurate, compliant and that there are no problems with respect to tax considerations.
Are you prepared to handle all of these difficulties? If not, you may want to consider overhauling your bookkeeping infrastructure. At Ashfords, we have some thoughts on how you can do that.
What challenges might you face in payroll processing?
Handling your payroll effectively is one of the more challenging aspects of business bookkeeping. Why? According to the Industry Skills Councils, there are a few key reasons:
- Discrepancies: When one employee is paid less or more than others at a similar level, this might be indicative of an error you need to correct. Is the employee actually being paid differently, or is this a mistake in the system? It takes time and energy to go back and check these things.
- Timeliness: Payroll processing is always on a tight deadline – people are going to demand their paychecks on time. Is your process efficient enough? If it isn't, you may find your system backlogged with multiple pay cycles to process, and employees are sure to become disgruntled.
- Record-keeping: For tax purposes, you need to have payroll records that go back at least five years. This means being highly organised and knowing where to find your records when you need them. If your business is ever audited, you need to have answers ready.
- Security: With sensitive financial information, one must be absolutely sure it doesn't get into the wrong hands. This is especially true in the modern era, as cybercriminals are always looking to steal financial data.
All of the above problems become more daunting as your organisation grows. This means constantly evolving is a must.
Do you have a suitable bookkeeping system in place?
If you're in the process of growing your business, you should also be improving your bookkeeping services – the two would ideally go hand in hand.
Women's Network Australia advises considering an integrated payroll solution that works seamlessly with your existing software and simplifies the process. You probably already have payroll data for your business on file in a legacy solution – ideally, you'd be able to cull information from your old system and move it over to a sleeker, more efficient platform without any issues. Also, you want to keep your old records intact because, again, detailed record-keeping is required by law.
Upgrading your bookkeeping infrastructure is not a one-time objective, either. Your system is something you'll need to review regularly. Every year, if not even more often than that, you should take a moment to look at your payroll management system and question whether it's up to the challenges that your growing business presents.
Upgrading your bookkeeping infrastructure is not a one-time objective. Your system is something you'll need to review regularly.
If it's not, you may want to consider asking for professional help with managing the upgrade. Any expense you incur in this area is likely to be well worth it; for starters, you gain efficiency, which will give your company a chance at a brighter future. Secondly, employee engagement will increase when people realise the benefits of a speedy payroll system. Everyone wins when payroll processing is easier.
How we can fine-tune your approach at Ashfords
If you're looking for a way to accelerate the payroll process, we can help at Ashfords. Our team of accountants in Melbourne uses a state-of-the-art cloud solution that automates everything and makes it easy to conquer any and all compensation challenges.
The cloud is a must-have in today's business ecosystem. It represents a way to take your existing payroll infrastructure and streamline it all – it will be easier for employees to store data, access it, share it and use it to make instantaneous, well-informed decisions. At Ashfords, we take that idea and capitalise on it fully.
Our system is built around the idea of improving your organisation with the use of real-time business intelligence. If you have numbers that are current and accurate, you can use them to add efficiency and reduce risk for your business overnight. Ask us today about how we can guide you through that process.