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

 

It is vital to take steps to ensure your team is paid accurately and on time every month, so how do you do that? 

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 employees concerned.

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

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. 

Over-reliance on one individual

School/academy payroll is a specialist area owing to the knowledge required to administrate Local Government Pension Schemes (LGPS) and the Teachers Pension (TP) scheme. Both schemes have varying statutory forms along with monthly/annual returns that must be completed accurately for your employees' pensions to be correct.

Various pay scales must also be considered because education pay scale structures often follow national agreements, with slight local variations made by either the local authority for schools or the governing body for academies. Term-time working, enhancements to pay, and staff with more than one contract can add further complexities.

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 inhouse, avoid problems now and in the future by ensuring staff receive regular training.

There is also the option to outsource to a third-party provider. Outsourcing has various benefits, such as the security of knowing that if a colleague is absent your staff will still be paid on time; additionally, you won’t need to worry about changing legislation and pension requirements.

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

Government legislation relating to payroll changes regularly. From alterations to national pay awards to changes relating to national insurance and tax allowances, you need to ensure your payroll team has its finger on the pulse, paying attention to changes as they happen in the sector. 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 update the system with changes quickly and simply and enable you to produce a suite of reports to assist in payroll validation and uploading to your finance system, for example, pre-payroll validation reports, pension reports, full pay-run reports, payslip summaries, monthly final payroll reports and BACS reports. It is worth noting that a software package capable of delivering the required accuracy can be a significant expense, resulting in a financial burden, especially for smaller schools/academies.

Inefficient backup systems

If your back-up systems are inadequate you run the risk of losing data; combine this with the rise of cyber-crime and it's not surprising that if systems fail this will be extremely disruptive to payroll. Remember also that 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 from the financial burden of staff training and expensive software. 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 and education sector experience delivers a cost-effective solution to the software conundrum. By outsourcing to an accredited provider, staff will be paid on time even if disaster strikes.

How a multi-academy trust improved payroll management

Transform Trust is a multi-academy trust comprising 18 academies and more than 900 employees. According to the Trust’s management accountant, “our previous supplier was very local authority-oriented with poor reporting formats and a lack of customer support. We needed a supplier that understood the academy sector.”

SAAF helped the Trust by setting up bespoke reports to make it easier for the academies to reconcile pay to contracts each month. The company also took responsibility for the administration of TP and LGPS, further reducing the pressures on office staff. “SAAF provided consistency across our payroll procedures straight away and increased efficiencies for each academy when managing payroll,” commented Transform.

The results

Transform Trust identified time and money saved, along with superior reporting, as the key benefits of transitioning to SAAF’s payroll service. “SAAF’s services have been a lot cheaper than ones we previously bought, and we’ve saved a huge amount of time through its enhanced suite of reports. It’s simpler to reconcile pay to contracts, and the Gross to Net reports we receive are clear and easier to understand when compared to reports from previous providers.”

Learn more about our Payroll Bureau

 

Related Articles:

How we improved a multi-academy trust's payroll management

<  Back to Blog


New Call-to-action

Subscribe to our blog for the latest updates & news

RECENT POSTS