There’s no denying that inaccurate staff payments can be a significant expense for businesses. But, what’s the actual cost? In some cases, the cost can be significant. For example, in 2019, Target Australia had to pay over AUD 9 million in back payments to staff after it was found that they had been underpaying their workers for several years.
The cost can fluctuate based on the nature of the situation. It can encompass overpayments, underpayments, missed payments, and even wrong tax deductions. This is a substantial risk to the organisation if these factors go unnoticed,the consequences can be dire. The financial impact of these blunders can mount up quickly, covering the expenses of correcting mistakes, addressing complaints, legal fees, and reputational harm.
You can read more about the risks involved by reading our blog Identifying & Mitigating the Invisible Risks of Payroll Errors
The problem lies in the complexity of the systems and processes that contribute to staff payments. There are multiple electronic and human interactions involved, and these interactions can be prone to errors and inefficiencies over time. Systems and processes organically grow more complex over time, making it increasingly difficult to pinpoint and rectify issues.
Unfortunately, simply upgrading IT systems is insufficient to address the problem at hand. Although technology can undoubtedly be beneficial, its capabilities are always confined to its programming. Frequently, the root cause of the problem is found within the human-centred systems – the area that exists between people and procedures. Adopting a problem-solving methodology that centres around the individuals who are utilising the software is critical. The impact of human error on staff remuneration can be substantial, demanding businesses’ focus on this area.
The lack of visibility is another problem. Auditors, dashboards, and exception reports can only go so far in identifying problems, weaknesses, and inefficiencies. There is a need to go deeper and identify issues at their source in and around your Human Capital Management (HCM) systems.
The good news is that there are solutions available for organisations. The key is to identify the areas of weakness and take action to address them. By taking a proactive approach to managing staff payments, businesses can reduce the risk of errors and inefficiencies and save significant amounts of money in the process.
One solution is to work with Payroll Experts Australia, we specialise in finding the right solution for your organisation. Our experts have the knowledge and experience to identify the areas of weakness in your systems and processes and develop a solution to address them. By working with Payroll Experts Australia, businesses can ensure that staff payments are accurate, timely, and efficient, reducing the risk of costly errors.
We offer a Payroll Health Check designed to analyse if your current processes and systems are free of errors and how they compare to your industry’s best practice. Our Payroll Health Check is a service that will provide a snapshot of the health of your current Business-As-Usual (BAU) Payroll and Time & Attendance functions, creates a detailed list of actionable recommendations and delivers a heat map highlighting the criticality and urgency of any identified risks and issues.
Businesses can email email@example.com or call 1300 287 213 for free first-step advice on how to ensure your Payroll processes can safeguard your Payroll compliance. Follow us on LinkedIn or sign up here to receive our articles direct to your email inbox.