In honor of National Payroll Week, we are talking about why is accuracy so important when doing a payroll? National Payroll Week 2022 is September 5-9 and “celebrates America’s employees and the payroll professionals who pay them.”
Employers are obligated to ensure that their employees are accurately and fairly compensated for the hours they work in a way that follows all employer laws. There are many laws that payroll specialists must follow to ensure payroll accuracy, including minimum wage and overtime laws (FLSA), payroll withholdings, and state wage and hour laws.
It may seem obvious that workers should be paid fairly and accurately for the hours they work, but workers do not always receive the full wages they are entitled to. When employees aren’t paid accurately, it is usually an oversight or simple error. With an effective HR and payroll system in place either internally or through a partnership with a Professional Employer Organization (PEO), businesses can confidently ensure that their employees are compensated accurately and on time each pay period.
Why is Accuracy so Important When Doing a Payroll?
There are many ways that businesses benefit from payroll accuracy, including:
- Prevent wage claims or lawsuits
Compensating employees accurately protects businesses from costly wage claims or lawsuits that can jeopardize profitability.
2. Keeps employees happy
Accurate payroll is a very important part of keeping employees happy and loyal to the company. A great HR team helps retain valued workers by providing quality payroll services, among other tasks.
3. Build a trustworthy brand
Companies who pay their employees accurately – never cutting corners on overtime or minimum wage laws – build a reputation as trustworthy and ethical. This kind of positive reputation makes it easier to attract and retain workers.
4. Accounts maintenance
When payroll mistakes are made, there is a chance of misrepresentation in ledgers. When payroll is accurate, businesses save resources and reduce stress while audits are being performed.
When employees are paid on time every pay period, it brings consistency to the finance and accounting process. Accuracy in payroll and book-keeping makes it possible to calculate precise fund requirements and projections, which helps financial management.
5. Compliance
Precise payroll records make it much easier for businesses to pay the payroll taxes they are required to pay to the government, such as ESI and Social Security contributions. Inconsistent and inaccurate payroll records can cost businesses in the long run with expensive accounting tasks and government penalties due to the inability to substantiate tax and other statutory payments.
6. Analysis
Accurate payroll payments and records maintenance is an important part of analyzing HR expenses that can help identify inefficiencies and excessive spending that are affecting company profits.
Managing payroll effectively requires skill and experience. Many small businesses choose to work with PEOs because of their full-service payroll services; knowing that their business will stay compliant and their employees will be paid accurately.
Don’t want to hire an in-house payroll specialist? That’s okay; we’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are compliant with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long and changes happen). When choosing a PEO to partner with, there are many things to consider including cost, services, and technology solutions.
With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet, or phone. We can truly improve your employees’ work benefits while freeing you up to operate your business.
What are you waiting for? Companies that partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!