Let’s face it: for some of your employees, the happiest days of the month is payday!
Honestly, it’s not hard to imagine why, given that it’s the day when all of their hard work is rewarded.
However, payday can turn from an employee’s highlight to an absolute nightmare… when it’s done wrong.
Payroll mistakes from employers sting, but in most cases they’re one-off mistakes that are easily fixed.
When they’re happening on a regular basis however, that’s a tell-tale sign that something’s wrong with your bookkeeping system!
Sometimes, you mightn’t even be able to identify the issue, causing you to scratch your head in disbelief month in, month out.
Does that sound like you come the end of the month? If so, it might be time we talk about some of the common payroll mistakes we see many businesses commit.
And more importantly, how you can solve them!
Join Maximum Business Solutions’ Melbourne bookkeeper as well look through common payroll mistakes.
Mistake #1: Manually processing your payroll
While this may have been the norm back in the 1990s, manual bookkeeping is way out of date.
The world has changed since the 90s, after all!
So why should you still be doing bookkeeping by hand... especially since we now have great tools that can digitally process payroll?
Manual processing is prone to errors, mistakes and double entries. And since it’s done manually, it can easily take up hours of your precious time. Finally, in many cases you’ll have re-enter employee data on every single payroll run - talk about a waste of time!
And we’re not even talking about pen-and-paper bookkeeping either. Manually plugging numbers into an Excel sheet is equally monotonous, not to mention prone to errors.
Avoid the boredom of manually inputting and calculating your employees’ payroll by switching to a more reliable payroll solution.
Talk to Maximum Business Solutions’ Melbourne bookkeeper about integrating a payroll system that does almost everything for you!
Mistake #2: Tax errors and non-compliance
In one of his private correspondences, Benjamin Franklin once said "...but in this world nothing can be said to be certain, except death and taxes."
And he was certainly right about that!
In Australia, employers are responsible for paying payroll taxes for all your staff whose total wages exceed the tax-free threshold. This number differs in every territory or state, but in Victoria it’s $52,083.
Needless to say, payroll taxes can become a major headache when they are calculated and recorded incorrectly.
Not only does this affect employees’ pay in general, but it also impacts your tax records and other important financial data and reports.
Not to mention, you could end up paying some hefty late penalties!
In many cases, these errors can be attributed to simple human error. Maybe you’re not familiar with the tax rate. Perhaps it’s a typo. It could even be something as simple as not being a maths whiz!
Whatever the cause, when it’s something as important as payroll tax, it pays to get help from a qualified Melbourne bookkeeper.
Mistake #3: Out-of-date payroll details
There’s more to payroll than just calculating wages and whatnot.
In fact, before you even start on calculating wages accurately, you need to make sure that you have all the necessary data. Not to mention, that they’re all up-to-date!
It sounds simple. But between processing jobs, ordering stock and overseeing operations, it’s easy for small details to fall through the cracks.
You might have outdated employee records. Whoever’s in charge of payroll might not have kept up with the latest payroll taxes and requirements.
Whatever the cause, you’re pretty much setting yourself and your business up for trouble. It might even reach the point where you have to hire outside help to tidy up your accounts!
Mistake #4: a late payroll run
To avoid a nasty fine from the tax office, your payroll needs to be two things:
With so many different elements, it’s easy to get overwhelmed and fall behind... especially when you have dozens of people working under you.
If there’s one thing you should avoid doing, it’s letting running your payroll run late. Not only can delays land you in legal trouble, but they’re also unfair to your employees!
In another time-related note, avoid rushing. All good things take time, after all.
And while many might disagree with the idea of bookkeeping as a “good thing”, be sure to take your time anyway. If you don’t, it can lead to inaccuracies which can affect employees’ wages.
Not to mention, you’ll be spending more time correcting these errors instead of working!
If you lack the time to get your payroll in order, why not get help? There’s no shame in offloading your payroll… or your entire bookkeeping, for that matter!
Looking for a Melbourne bookkeeper who can help you avoid committing these payroll mistakes?
Maximum Business Solutions provides you with high-quality bookkeeping services - including payroll solutions!
Whether you are handling only a handful number of employees or fifty of them, you’ll have to make sure that your payroll accurately reflects all the hard work they have done for your business.
And if you or your team are constantly running into these common payroll mistakes, perhaps it’s time to slow down and figure out exactly why this is so.
Stumped? Don’t worry - you can always lean on Maximum Business Solutions!
With our help, you can eliminate these common payroll mistakes entirely. Our team guarantees attention-to-detail and accuracy for all your payroll needs.
In fact, we’ve even been nominated for Bookkeeping Firm of the Year by the Australian Accounting Awards!