Discover the two main reasons why businesses miss the pay run and learn how to get back on track if it happens to your company
You want to take care of your people and your payroll. But what happens if you miss the pay run due to cash-flow challenges or issues with your processes? By addressing problems sooner rather than later, you can quickly get back to bossing your payroll.
Paying your employees on time is important. If you don’t, it could lead to an unhappy workforce. According to research by Sage, 35% of UK employees said they’d look for a new job if they were paid late. Meanwhile, UK law says you need to let employees know which date you’ll pay them (this is typically featured in their contract). If you don’t pay on time, this could result in a breach of contract – and you could be sued by your employees.
Why the pay run can be missed
There are two main reasons why you may miss the pay run: insufficient funds and payroll process mistakes.
Financial pressure has been an issue for businesses over the past 12 months due to coronavirus. With a drop in revenue and a lack of cash flow, paying staff on time (if at all) will have been a challenge. Although the government’s support schemes have helped, when they wind down, financial issues may return – and that could have an impact on employees getting paid on time.
With payroll processing, mistakes can be easily made. It’s a big task, especially if you’re new to it. And when you add ever-changing legislation, payroll can be tricky to manage.
Get back on track
When it comes to ensuring money is available so you can pay your people, start by planning and forecasting your cash flow. Meanwhile, issue and collect invoices promptly to ensure funds are in the pot. If cash is low, explore prioritising your best suppliers and delaying payments to others, or look at funding options to cover the pay run.
If delays are down to payroll processing mistakes, identify and rectify the problem, then (if needed) get the support required to ensure it doesn’t happen again. Perhaps work with a payroll expert, who can help you navigate any processing and legislation challenges.
And keep your employees in the loop – let them know what’s happening if you have pay run issues.
Automate your payroll
One way to stay on top of your pay run requirements is to automate them. By automating your processes with good payroll software, you’ll save time, reduce manual data entry and errors, and stay compliant with HMRC.
Reasons for not processing payroll on time include missing details such as new joiner information and forgetting deductions. But you can boss your payroll by automating these tasks – and payroll software can be cost-effective for even the smallest of businesses.
The possibility of missing payroll can be a worry for any business owner. But by following the advice above, you’ll give yourself the best chance of taking care of your payroll and your people.
To find out how you can boss your payroll, visit the Sage website.
by Mai-Po Wan, Product Marketing Director, HR & Payroll, Sage