Why the Payroll Process is Broken and How to Fix It

by Heidi Birkin, 3 minutes read
HOME blog why the payroll process is broken and how deputy can fix it

When it comes to paying your staff, it’s never as straightforward as it seems. One employee worked overtime, another employee skipped a shift, another employee needs to be paid a different rate.

Payday doesn’t bring the joy it once did. Your staff are frustrated and you’re constantly fixing mistakes.

Let’s face it. The payroll process is broken — but you can easily fix it.

Payroll is complex

On the surface, payroll is simple. Multiply hours worked by the rate of pay, send the numbers to finance, and you’re done. The reality, of course, is more complex.

First, you need to capture time. It’s often manual, even paper-based, and massively prone to error. Next, you have to collect data. Is your team signing in on paper timesheets? Are you using a spreadsheet to “automate” data collection? How often are you finding mistakes, even at this stage?

Let’s say you’ve collected your timesheets and you’re ready to send it to your payroll team. If the data is unreliable, or pieces are missing, approval takes even longer and delays payroll calculation.

And speaking of calculation, this can be a serious headache for businesses that pay different rates depending on factors like location, day of the week, hours worked, and age.

Then, finally, it’s approved and ready to process. But issues with payslips come up and can be hard to track.

The cost of inefficient payroll

Acquired in 2018 by Stratford Retail Group, MPK Garages is a large forecourt operator, with 29 sites across the midlands and northern England. MPK’s 150 employees include a mix of managers, service, cashiers, and delivery drivers. And a broken payroll system was costly.

“Our head office had to manually reconcile payroll once a week, which took one person an entire day and inevitably resulted in errors,” says Nerissa Haskic, Director of Stratford Retail Group.

Broken payroll can be hard to see. Your head office may simply not know how much admin work is needed to keep the payroll system working. Or maybe no-one “owns” end-to-end payroll. Whatever the reason, that broken payroll is costing more than you think.

  • Dissatisfied employees. Payroll glitches can easily dent morale, customer service, and productivity.

  • Poor visibility. Without a clear view of hours, rates, and pay, businesses find it hard to make cost-related decisions.

  • Too much pressure. Payroll inefficiency creates an even greater burden on an already stressed resource.

  • Compliance risk. New laws are putting more pressure on businesses with hourly paid or shift workers to record, maintain, and publish accurate records of hours worked.

Pay that works

Payroll shouldn’t just work for the people at the top. Everyone on your team, including you, can benefit from a streamlined, accurate payroll.

The key is to find systems that accurately automate the process for you. Easy payroll starts with simplified timesheets. Here are three things to look for to fix your broken payroll.

  • Time capture and approval. Allow employees to clock on and off with a mobile app, onsite kiosk, or SMS. But on top of that, make sure your time capture system automatically generates timesheets and that are instantly available for review and approval. Any queries can be solved before timesheets are sent to payroll. Bonus: find a system that manages custom pay rates, solving one of the biggest challenges in the payroll process.

  • Payroll integration. Your scheduling tool should easily integrate into payroll systems to eliminate the other key manual step in the gross pay data flow process. That way, finance staff are freed up from tedious admin.

  • Reporting and compliance. Ensure your system creates an accurate audit trail of employee details and makes it easy to manage pay rates, accrue leave and track time worked, breaks taken, and paid time off.

Make pay work — Without the work

Accurate timesheets, easy pay run, and error-free paychecks. It’s not a dream.

Whether you manage a small coffee shop or a large restaurant chain, your payroll just got easier. Download Making Pay Work to learn a few more tips to fix your broken payroll process.