Manual Payroll System - The Real Cost of Payroll

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Manual Payroll System - The Real Cost of Payroll
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• Many of our clients who have moved from the
  traditional methods of accounting to the cloud
  using simple bookkeeping software solutions have
  been surprised at the positive impact on the
  bottom line.
• When they look at their profit and loss
  statements, they can pinpoint cost savings to the
  month they made the switch from manual payroll
  system to streamlined software. Quite often they
  drill right down and discover the savings around
  time and money (and lets face it time IS money)
  and its connection to payroll.

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• Here are some of the challenges payroll can
  throw up when processes and procedures are done
  manually, in spreadsheets or in cumbersome,
  desktop accounting software that isnt exactly
  user-friendly.

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• Miscalculations on PAYG
• Not having the correct tax tables set up
• Superannuation calculated incorrectly
• Not accruing annual leave properly or efficiently
• Confusion through not having proper or efficient
  record keeping processes
• Human error

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• If any of those things happen, an unhappy
  employee will call and suddenly accounts staff, a
  bookkeeper or YOU if youre overseeing the
  financials may end up trying to fix it. So lets
  look at a scenario here and the cost to a
  business of a simple payroll error
• Jay runs a landscaping business. Mark is one of
  his staff members. Mark has a few super accounts
  that he has been advised to roll into one so he
  has been collecting all the paperwork and
  checking the payments and balance of his super
  accounts when he notices an error in his super.

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• Mark call Jay to tell him about suspected
  miscalculation of super wage calculation in his
  payslip. There goes 10 minutes!
• Jay calls his bookkeeper. Shes with a client
  shell call him back. 2 minutes gone.
• Jay decides to do some investigating himself and
  looks around for paperwork but cant find
  anything. 30 minutes of wasted time.
• The bookkeeper calls him back and chats to Jay on
  the phone about it. There goes another 10 minutes.

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• A week later he still hasnt heard back from his
  bookkeeper so Jay calls her again. 5 minutes.
• The bookkeeper is investigating the
  miscalculation and has spent time on the phone to
  the Australian Tax Office and to Mark asking him
  to forward all his documentation again. The
  bookkeeper has totted up 2 hours already trying
  to sort this out. Mark also came into the office
  when he should have been out on a job to sort it
  out. Theres one hour of wages not related to any
  revenue coming in.

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• The bookkeeper finally streamlines the payroll
  and gets to the bottom of it and discovers that
  all of Jays 10 staff members have been paid
  incorrectly. She estimates it will take her a
  days worth of work to fix the issue.
• So, just from this scenario were looking at a
  day and half of wages on a payroll issue. That is
  money down the business drain! And we can only
  imagine the additional costs involved in the back
  pay of the miscalculated super. Ouch!

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• There is an opportunity cost attached to this.
  That day and a half Jay and his bookkeeper could
  have been doing what theyre meant to be doing.
  Jay could have been working on his marketing and
  getting new clients on board.
• His bookkeeper could have been getting up to
  date and in front with payroll, instead her To Do
  list has moved the side as she works out the
  superannuation issue.

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• Were not saying that simple bookkeeping
  software takes errors out of your business
  completely. What we are saying is that an
  automated approach, set up by cloud and
  accounting software experts with experience in
  this area, will minimise errors and allow
  business owners to be alerted to issues MUCH
  sooner than months later when the financial
  damage is bigger and harder to manage.
• We all know the phrase back pay strikes fear
  into the very heart of a business owner! Lets
  keep that to a minimum, shall we?

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• Tiered of using your old manual payroll system?
  To discuss automation processes for your business
  please contact us.