2. 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 let’s face it time IS money)
and its connection to payroll.
3. 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
isn’t exactly user-friendly.
4. • 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
5. If any of those things happen, an unhappy
employee will call and suddenly accounts staff, a
bookkeeper or YOU if you’re overseeing the
financials may end up trying to fix it. So let’s 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.
6. • Mark call Jay to tell him about suspected
miscalculation of super wage calculation in his
payslip. There goes 10 minutes!
• Jay calls his bookkeeper. She’s with a client –
she’ll call him back. 2 minutes gone.
• Jay decides to do some investigating himself and
looks around for paperwork but can’t 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.
7. • A week later he still hasn’t 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. There’s one hour of wages not related to any
revenue coming in.
8. The bookkeeper finally streamlines the payroll
and gets to the bottom of it and discovers that all
of Jay’s 10 staff members have been paid
incorrectly. She estimates it will take her a day’s
worth of work to fix the issue.
So, just from this scenario we’re 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!
9. There is an opportunity cost attached to this.
That day and a half Jay and his bookkeeper could
have been doing what they’re 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.
10. We’re 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! Let’s
keep that to a minimum, shall we?
11. Tiered of using your old manual payroll system?
To discuss automation processes for your
business please contact us.