Contact us

SAAF Education Blog: Payroll Management: The pitfalls and how to avoid them

Payroll Pitfalls Banner.jpg

Payroll Management: The pitfalls and how to avoid them

Payroll management is a complex and specialist area, with errors arising from:

  • Inexperienced or ill-informed teams.
  • Dated or ineffective software.
  • Loss of data and backup failures. 

It is vital to take steps to ensure your team is paid accurately and on time every month. How do you do that? Avoid these common pitfalls, and you'll be on the right path.

Late or inaccurate processing

In a fully functioning payroll system, every member of your team is paid accurately and on time. Understandably, any failure to do so leads to employee dissatisfaction and poor productivity.

However, one of the most common payroll mistakes – often caused by an inexperienced or overworked payroll team – relates to incorrect processing, which can cause distress to the staff member concerned.

If your payroll is managed in-house, it's vital that your team is fully trained to understand the complexities of payroll processing because correcting errors can be time-consuming and difficult. 

Overreliance on one individual

Payroll at schools and academies is a specialist area because of the knowledge required to administrate Local Government Pension Schemes (LGPS) and Teachers Pension (TP) schemes.

Both schemes have many different statutory forms along with monthly and annual returns that must be completed efficiently and accurately for your employees' pensions to be correct. 

Various pay scales must also be considered because teacher and support staff pay scale structures often follow national agreements but have slight local variations made by either the Local Authority for maintained schools or the governing body of your academy.

Term time working, enhancements to pay, and staff with more than one contract can add further complexity to the process.

Without a doubt, this can be a minefield for anyone without considerable training and experience to manage, especially if payroll processing is the responsibility of just one team member. If this is the case, then you run the risk of delays if they're suddenly incapacitated.

Ultimately, the size of your payroll team should be sufficient to meet the requirements of your workforce. If you manage your payroll in-house, avoid problems – now and in the future – by giving staff detailed training.

There is another option to consider; outsourcing to a third-party provider. Outsourcing has various benefits, such as the security of knowing that, if one member falls ill, you and your staff will still get paid on time, and you won’t need constant training to keep up to speed.

If this interests you, click here to find out how our payroll bureau can save you time and money.

Lack of up-to-date legislative knowledge

Similarly, government legislation relating to pay at schools and academies changes regularly. 

From alterations to National Pay awards to budget changes relating to anything from National Insurance to tax allowance, you need to ensure that your payroll team has its finger on the pulse. They must pay attention to any changes happening in the sector, whilst also attending regular training.

However, maintaining the necessary specialised knowledge can be incredibly challenging, especially for a small school administrative team.

Software that isn’t fit for purpose

If you want to manage payroll effectively, you need access to an up-to-date software package. The right software will enable you to produce a suite of reports to ensure you can run your payroll each month. For example, pre-payroll validation reports, pension reports, full pay run reports, payslip summaries, monthly final payroll reports and BACS reports.

However, it is worth noting, a software package capable of delivering the accuracy required to maintain a compliant payroll can be a significant expense resulting in a financial burden, especially for smaller schools and academies.

Inefficient backup systems

If your backup systems are inadequate, you run the risk of losing data. Combine the rise of cybercrime with the legacy equipment often found in schools and academies, and it's not surprising that running payroll becomes an issue if systems go down. Remember, data losses are incredibly expensive and can even lead to legal action.

To avoid these payroll pitfalls, outsource to an expert provider

Outsourcing your payroll to a dedicated third-party provider can prove invaluable, relieving you of the financial burden of on-going training required to keep your team up to speed.

A payroll bureau – by nature of its service to multiple customers – can save money through volume transactions. As a result, outsourcing to a reliable bureau with the right software delivers a cost-effective solution to the software conundrum. By using an accredited provider staff will be paid on time even if disaster strikes.

Learn more about our Payroll Bureau

<  Back to Blog