Now is the time to take stock of your payroll

29 July 2021

The payroll world has come to the close of a particularly busy time, seeing out year-end by completing tasks such as P60s and P11ds. Although payroll is always moving, and certainly busy, the summer months are a great opportunity to take a breath and think about how the payroll is working. Payroll can be a complex and time-consuming task, so a deep dive review on a regular basis can assist in streamlining to ensure it works both efficiently and accurately. With many employers having used, or still using, the furlough scheme, it’s of even greater importance to take stock of the payroll. 

One area to investigate is the flow of data through the payroll. A more streamlined and automated process will result in higher accuracy. In a previous article we discussed how to streamline the flow of the data through areas such as driving payroll from HR systems, having up to date company data policies and detailed training for staff. 

Another area for consideration is the payroll set up itself. Many payrolls can become messy over time with historic components, schemes, or even out of date calculations. Payroll software will produce the most accurate results if kept up to date in line with the company’s policies. 

It’s a great time during the summer months to review any components, deductions that may no longer be needed and remove them. Some of the other things that you should consider include:

  • Ensuring that company schemes such as sickness, parental leave etc haven’t changed. Are they set up in the payroll to reflect how they are now? 
  • Checking calculations, such as prorations, which can be easily missed. If a company has set rules for how the treat pro rata in certain situations, such as mid-month starters/ leavers, then most payroll software can hold those rules. 

Taking time to revisit these will ensure the payroll runs as expected and reduce the need for intervention or long winded checks from staff, thus saving on precious resource time. 

Many employers have used furlough and flexible furlough throughout the past 16 months and will know that with it came some complexities. As the Coronavirus Job Retention Scheme (CJRS) became embedded the guidance was regularly updated, and that may well mean that some of the earlier calculations used by employers could now be outdated. As more and more employers start to reduce their use of the scheme, or even stop making use of it, it is an excellent time to go back and review the claims made and the calculations used to raise those claims. Once CJRS comes to a complete end it will then become something HMRC look to audit, and it is important for employers to be prepared and comfortable that they have accurately calculated claims in line with the current guidance. 

For information on how RSM can support on streamlined payroll as well as any concerns or queries about CJRS reviews, please contact Simon Balaam or Steve Sweetlove.