Avoid Costly Payroll Mistakes!

Payroll is often the largest operational expense for a business and payroll mistakes can have a significant impact on the business. You don't need an investigation by a taxing authority or a court case with a disgruntled employee. Payroll is the heart of the employee/employer relationship so setting up fair and transparent policies minimizes the chance for errors and resulting problems. Develop and communicate your Payroll Policies and Procedures.

1. Put it in writing - describe how you determine rasises, promotions, bonuses. Generally policies that are based on objective performance assessment keep you within the law.

2. Implement pay changes at the correct time - over or underpaying an employee can result in loss of cash flow or the added burden of needed to correct payments. These type of mistakes cna can undermine an employees' trust.

3. If you have made a mistake deal with it immediately - overpayment of pay is more common than you might think and it can be hard to recover without employees feeling unfairly burdened by your mistake.

4. Assess termination pay correctly - your payroll policy should dictate how to determine final pay. Mistakes of overpayment can be especially costly as trying to recover funds as the former employee may be difficult.

Remember that payroll policies and procedures as well as a systematic method for easy payroll processing can reduce costly errors and unwanted problems- freeing you to concentrate on growing your business.

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