Accuchex Blog

5 Problems Threatening Your Payroll Process

Posted by Tristan Ruhland on Sep 22, 2016 9:00:00 AM

Despite the use of payroll software and other tools, there are still common problems with payroll management that must be consistently addressed.


If you are like most entrepreneurs, when you first started your business, handling your own payroll management was a fairly simple task.  You kept a ledger, paid yourself and maybe just a few employees. The payroll process didn't eat up your valuable time so you could spend that time growing your business.

Eventually, the time spent growing your business paid off  and you may have found that, not only have your sales increased, but your staff has also increased to meet the demands of your growing business.

And the once-simple payroll management process has ballooned and - along with it - your time spent on it has also increased.

The Law of Diminishing Returns

There comes a point where the benefits of handling your own payroll start to diminish.

"The Law of Diminishing Returns" states, "there is a level where profits and benefits gained is less than the amount of money or energy invested."  In other words, there comes a point where you can spread your support personnel too thin and find that your business growth starts to plateau.

As an owner or payroll management professional you have probably encountered all of this - and more!

Optimizing Your Payroll Management Process

In a recent survey more than half of the businesses polled stated that there is room for improvement in their payroll process. The most common payroll errors were organizational consistency in the payroll process, incorrect tax withholding, over and under payments, as well as many other areas.

While up-to-date software can enable HR, payroll, and employee data to be less overwhelming, if storage and processes are not well organized,  you are open to errors. And this can back up your payroll department back by several days.

Five Problems That Threaten Your Payroll Management

Here are five common problems with typical payroll management processes for companies doing payroll in-house, and some tips on how to resolve them: 

1. Administrative Overwhelm

Many businesses, especially smaller ones, still carry out their payroll process in-house and manually. A manual payroll system typically requires a great deal of paperwork. A manual process also creates an administrative burden for your and your HR staff.

Errors in data entry, for example, can create payment issues and the misapplication of rules. This can resolved by using an integrated software. In fact, a great initial solution is to simply invest in payroll software, which can be far more cost-effective than hiring additional staff to handle a growing manual process.

Another approach that even smaller businesses can afford is to outsource your payroll management. This allows some or all of your payroll and HR processes to be managed by a professional firm. 

2. Organizational Issues

A related problem is one of simply keeping all of your important payroll and employee records and information organized in an effective and accurate manner. Sometimes it is simply a matter of work flow: keeping files and documents in a central location and creating uniform filing processes.

Gradually minimizing, or even eliminating, paper forms and files can be an effective solution, This, too, can be accomplished by using a payroll software that has all your human resources and payroll functions integrated. But whether you retain a manual approach or invest in a robust payroll software package, it is important to analyze and re-think your organizational process.

3. Incompatible Software

If you haven't experienced it already, you may find that not all payroll programs are compatible. For example, the program used for your employee profiles or records may be different from the system you use for pay and benefits. And what about the program used for your employee performance? 

Finding and investing in a program that can integrate all of these functions will streamline your overall process, reduce the amount of time spent tracking and with data input, and even allow your entire department to become more efficient and cost-effective.

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4. Tracking Employee Absence

Manually tracking your employees' vacation and sick days can be a task fraught with potential for mistakes. Paper time cards and even simple digital time sheets are notoriously prone to misuse and unintended errors. In addition to the payroll, tracking which employees are not available due to various types of absence, is critical for effective planning and optimum productivity.

Having an efficient and even digital timekeeping system can eliminate most, if not all, tracking and time card problems for your payroll management process.

5. Compliance Issues

The California legislature recently passed a number of new laws and amended many others. Most of these changes already took effect on the first of January this year. As a result, it’s important for California employers to review their current policies and practices to ensure compliance and provide for any required new workplace postings.

Accurate and timely management of compliance practices are required for every business and every payroll professional.This is especially crucial for businesses to avoid costly complaints and government investigations and penalties.

Fortunately, an outsourced payroll solution can mitigate this risk. a reputable payroll management services provider, can not only relieve you of the burden of your ongoing and changing compliance demands, but can potentially prove to be a more cost-effective solution, as well.

Consider Outsourcing As A Solution

Payroll management is a business function that, along with taxes and other HR functions, is often outsourced. This means your HR team can concentrate on more important matters, such as increasing productivity and employee engagement.

However, as a business owner or manager, it is quite common to think of "outsourcing" in terms of an "expense". One of the first questions that come to mind is usually, "What's it going to cost?" But outsourcing can actually be a very cost-effective move, and one that can free up valuable time and resources within your organization.

It should, in fact, be viewed as an investment

In addition to resolving the common problems in managing your payroll, you can include the peace of mind of knowing that your other HR processes are being handled competently, accurately, and on time. On top of that, you can be assured that the accountability and liability for compliance rests with your vendor, freeing you from the constant pressure of staying fully informed and compliant with the ever changing - and growing - rules, regulations, and legislation.

Finding a Reliable Payroll Management Service

As a business owner or payroll manager you have a number of options for your payroll functions. Software that can be installed in-house, or cloud-based programs offer a good alternative. But if you really want to take full advantage of the benefits available to you, outsourcing to a provider like Accuchex can still be the best decision.

Reliability, full-service options, and reputation are the hallmarks of a quality payroll management service provider. If you are currently looking to invest in outsourcing you get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.

Free Download: Payroll Outsourcing Guide

Topics: Payroll, payroll management, payroll process, outsourcing payroll management, payroll compliance

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