17 Aug Common payroll system mistakes SMEs make all the time
Having an effectively managed payroll system is essential for all businesses. They act as records of wages, taxes and verification of contractor or freelance worker payments, and can be inspected by HMRC at any time. As such, companies must have an efficient and accurate system in place for managing their payroll. However, with so many different aspects, combined with the many other challenges SMEs face on a daily basis, payroll system mistakes are easily made. As such, our experts have put together a short list of the most common payroll mistakes, so that you can avoid them.
1. Not keeping backup files
While you may think that your records are safe in a digital format, it is essential that you have backup copies. A broken server, a network that has gone down or even a lost hard drive can all mean your records are gone for good, which will cause unimaginable problems for your business. As such, we would always recommend having backup copies of your payroll records, and storing them in the cloud, making them accessible at any time.
2. Not securing sensitive information
Employees’ wages are sensitive and private information, and they must be treated as such. Therefore, it is a legal requirement that all data within your payroll system is private, and can only be accessed by those with a direct need. Not securing this private data may cause you to be in breach of the new GDPR legislation, which can result in heavy fines.
3. Not asking for help when it is needed
For many SMEs, there isn’t a specific in-house team focused on payroll management. As such, the people who undertake the work may come across problems which are not easy to solve. Instead of hoping for the best and ignoring these difficulties, it is essential that outside help is found and the problems solved. Given the huge importance HMRC places on your business records, combined with their importance to business management and daily cashflow plans, mistakes in your payroll system can be extremely costly.
At SQK Accountancy, we pride ourselves on offering VAT and cloud accountancy services for clients across a wide range of industries. Our professionals can offer bespoke and tailored services for your firm, suiting our solutions to your needs, allowing us to provide you with the best possible service. For more information, please contact us today.