Often, businesses can spend valuable time trying to sort out the payroll each month, often at the expense of other important tasks which might help with growth. With that in mind, we’ve put together some key payroll process improvement ideas.

Find the right payroll software

First of all, it’s important to remember that smaller software costs don’t mean that the process will be cheaper in the long run.

This doesn’t mean your software needs to be expensive, but finding the right one is fundamental for your business. 

When looking at payroll software, there are a few things you should consider:

  1. Legal requirements – You need to make sure the software you use is always going to be up to date with the UK’s legislation. Picking software that doesn’t have many commitments in the UK is risky. They might be compliant at the moment, but will they develop the software if they don’t have much demand?
  1. Time efficiencies – Having the right software can be the difference between the same payroll taking 1 hour to process or 2 hours. If the extra cost is £5 a month and you pay weekly, £60 a year will have saved the payroll processor 52 hours. This should be seen as an investment and money well spent.
  1. Digital/cloud-based – The business world is becoming more and more digital and you need to keep up to date. For example, picking software that has digital payslips may not seem like a big win. But, when employees can see their payslips on an app or through a browser, what savings are you getting? There are the obvious savings on stationery costs such as ink, paper and postage. There’s also time savings by distributing documents at the click of a button. 
  1. Time tracking – If your staff work variable hours then cloud-based tracking or timesheet software is definitely worth looking into. Having everything in one place and available to everyone at the same time goes a long way. Employees can enter their own times, or it can be done automatically by clocking in. You can also utilise alerts, such as notifying management at the approval stage or notifying the payroll processor that everything is finalised.
  1. Integrations – If you are using multiple pieces of software for different features, can they talk to one another? If you don’t have to transfer any data, payroll becomes far more time-efficient and reduces the chances of human error. 

Align pay frequencies for all staff

The fewer pay runs that need to be processed, the fewer time commitments there will be from your staff. Bi-weekly is twice as inefficient as weekly, and monthly is twice so again. If you’re an employer that pays more frequently than monthly and you feel you are spending too much time on the payroll process, the first thing you should consider is reducing those pay runs. The transition might be a challenge and needs some planning but the benefits will be huge.  

However, this only works if you can migrate all employees. It’s amazing how many employers we see with staff being paid on different frequencies to one another. If you have some employees on weekly and others on monthly, this is less efficient than having them all on weekly. It’s 12 more times a year you need to file an FPS, keep up with any pension obligations, open up the payroll software, and more. 

Have the same member of staff responsible for the payroll 

Having a staff member who’s the figurehead for the payroll is vital to make sure changes and updates aren’t missed. If it’s one person collating the information, it will all be directed to the same place. If you don’t know who’s in charge of the payroll function, how can your staff members? Payroll information is highly sensitive and, especially with the new data protection regulations, you need to make sure you pick the right person for the job.

The more payroll process improvement ideas you can incorporate, the more of a benefit your business will have. If you would like to discuss any of the above in more detail then please do get in touch