How Companies can avoid paying a hefty price for incorrect payroll!

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Paying employees accurately, on time, every month is not just a legal requirement, but also an ethical and professional function of any reputable business.

As companies expect employees to turn up and work, they expect to get paid on time and correctly. This agreement forms the foundation of all employment relationships. This special employer-employee relationship can only remain cordial if the correct payroll solution is adopted.

One doesn’t need rocket science to predict that an unsuited payroll will create problems for both the company and its employees. The truth is that payroll problems mean much more than dissatisfied employees. More frighteningly, it might end up creating legal issues, a position most companies should try to actively avoid.

Given the critical importance of the payroll, human resource departments have an unshakeable duty to caution their companies against adopting a payroll solution willy-nilly without fully considering its capacity and the attendant risks. If a company is using an incorrect payroll, new engagements, terminations, leave calculations, tax changes can become unnecessarily complicated and tiring processes.

The absence of payroll solutions is widespread in small and medium-sized enterprises (SMEs).Research indicates that, the SME sector which is the fastest growing in Zimbabwe, lack the capital to invest in appropriate technologies that bring efficiencies to their operations. As a result, they resort to manual processes which are prone to errors which may cost the business huge sums of money.

Adhering to statutory compliances is necessary for all big and small companies in the world to keep their businesses safe from the legal trouble. A deep knowledge of statutory compliances is required to minimise the risk associated with the noncompliance of statutory requirements.

Some of the risks include: –

  • Penalties for not remitting accurate / on – time payroll taxes to statutory bodies.
  • Loss of reputation and lack of integrity.
  •  Customer Loyalty is heavily impacted.

It is important that companies choose payroll service providers who either use a proven solution to process their payroll or own their own proprietary solutions which are of repute.

Every miscalculated payment creates more constraints in resource time rectifying this error, and in some rare cases, back payments and fines might also mean a disturbance that the finance team has to deal with along with the HR team trying to reassure the disgruntled employee.

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