Getting paid—it’s one of your employees’ favorite things about work (if not the favorite) and it’s also one of your biggest headaches as an employer. That’s because handling money, particularly other peoples’ money, is a huge deal. Processing payroll, there are a lot of things that can go wrong to make your company non-compliant, subject to regulatory penalties, and negatively affect your bottom line.
Below are three ways your current payroll practices may be putting you at risk:
1) Erroneous payroll processing
Whether it’s by mistake or due to fraud, incorrect payroll processing is a huge risk to employers. This can be as simple as a keying error, or as serious as an intentional falsification of time worked. Regardless of the cause, it can infuriate the affected employees, or decrease your revenue and cost you hundreds, if not thousands or more, in lost funds.
2) Inefficient payroll systems
Outdated paper-based payroll systems are chock full of ways that mistakes can make their way into your payroll and cause you harm. Do you use timesheets and spreadsheets to calculate your payroll? If so, then the chances are that you are manually entering and transferring data from one to the other. And with every touch or transfer of information the chances of an error occurring increases as does the time needed to double check your data entry.
3) Insufficient security
Payroll is teeming with highly personal information which makes it a target for identity theft and embezzlement. Is your network secure? What about your server? If a breach occurs do you have a plan on how to proceed? Is only one person in charge of payroll? Or does anyone else do surprise audits of payroll, or review and approve payroll payments? Giving all the power to only one person, combined with the absence of a secure system that has internal checks and balances, greatly increases your chances of payroll fraud.
There is no escaping the fact that payroll is a major part of doing business. If it isn’t done well then it not only causes stress but can also anger your workforce, threaten your reputation, and even lead to legal ramifications.
So why waste your time and energy worrying about payroll processes when you can shift the responsibility, and burden, of it to a PEO?
To find out how ScalePEO can simplify your payroll process, provide expert tax advice, securely store your records, and more, request a demo today.