Dynamic Business

PAYROLL

Another system vital to the running of your business is payroll. While there are many factors involved in running a successful business and maintaining good relationships with employees, payroll is one of the most important. It might be your biggest expense, but it is a critical process that must be performed on time and accurately, not only to pay employees, but also to handle regular reporting to various government agencies.

At the heart of any payroll system is your payroll software. This software services your business in many ways. These can include:

• Services office administration in making the payroll processing easier
• Services employees by dispensing pay in a timely manner
• Services the manager/business owner by providing management reports to help you meet legislative requirements and protect you from legal action or penalties for making incorrect or under payments.

Before you buy a payroll system there are a couple of things you need to consider:

• Do you actually need one? If you have a workforce of less than ten it is not advisable.
• What types of features you would like your payroll to contain. For example: calculating commission, salary, electronic tax filing etc.
• What are your pay frequencies?
• What types of employees do you have? (e.g. temporary, part-time, full-time)
• Awards and payroll requirements (e.g. payroll tax)
• Integration of the payroll system with accounting software
• Technical support, training and testing the software before you buy

Once you have figured this out, the next aspect to consider is your staff. There is nothing worse than having staff that doubt the accuracy of your payroll system. It is important that your employees have confidence in your payroll system and how it is administered and managed.

Employees have a legal right to receive accurate pay, a pay slip containing not only their gross wage and deductions but complete details of what they are paid for, entitlements such as leave balances and RDOs, and superannuation payments made on their behalf. From your business point of view, the link between your payroll capabilities and employee satisfaction highlights the importance of managing the process accurately and effectively. If there is one piece of software that has the capability of affecting employee relations in a negative way, it is your payroll software. Good payroll software should be transparent and should do its job in an effective and timely manner.

There are a number of great resources out there to help you with your payroll requirements. A good place to start is the Australian Federation of Employers and Industries website. They have developed an Employers Payroll Information Kit, which provides employers, HR and payroll staff with all the essential information about employees’ wages and conditions. The kit covers off payroll records with details and examples of all records that must be kept, taxation and superannuation, termination payments, worked examples and sample forms, practical guides for payroll staff for pay and record keeping and tools for management control.

Systems are a vital component of your business. Having strong business systems in place will ensure the smooth and effective running of your business operations.

This article is brought to you by Commonwealth Bank