Many accounting firms choose to offer payroll services to their clients out of necessity. It is a service that clients expect firms to deliver as part of a full-service offering. However, firms are often mindful or reluctant to offer payroll services due to security concerns about moving data and files manually, the risk of making errors and time sensitivities around delivery.
These concerns can largely be alleviated by various methods such as segregating duties, using the Faster Payments network and setting up payments in advance.
Accountants can process payroll even more securely by utilising payroll software which provides a secure end-to-end workflow from a centralised dashboard to process payroll entries and set up payments, ahead of time, to employees and HMRC.
This new way of processing payroll removes many of the associated risks and creates an opportunity for firms who don’t do so already to introduce a light touch and profitable service line.
Segregate payroll approval
Segregating the approval of payroll is good practice as it builds in an extra check. This reduces the chance of incorrect values being paid out to employees and demonstrates good financial control.
Paying out incorrect payroll values to staff can put a significant time burden for accountants and an extra complication at month-end when reconciling balance sheet accounts.
Additionally, segregating payroll approval allows for more junior members of staff to get involved with its administration. This helps develop their skills, is cost-effective, and frees up the time of managers.
This is in firms' best interests as developing their staff will help retain them and perform their overall roles better.
Set up payments in advance
Using software that sets up payroll payments in advance can be a lifesaver for firms who have to process payroll for hundreds of clients, and thousands of employees, each month.
The time sensitivity of processing payroll and having just a few days mid-month to gather final supporting data and documents, makes completing assignments particularly challenging.
Setting up payments in advance helps manage the overall process by giving accountants the flexibility to queue up related salary payments for clients as their payrolls are completed instead of having to wait until just before they are due.
Utilise the faster payments network
Making payroll payments via the Faster Payments network is another effective way of ensuring that payments are accurate and transact in time.
Faster Payments clear users' bank accounts within 90 seconds of being paid so accountants and their clients can be confident employees will be paid on time, even if transactions are set up on the day they are due.
This builds in more time for completing payroll, as opposed to using BACS which takes three working days to clear accounts. Payments via these slower methods reduce the time available to complete payroll as payments have to be set up at least three days before they fall due.
Remove the risk of data leakage and fraud
Using a connected payroll system, which integrates accounting software with payments through a centralised dashboard, overcomes many risks of data leaks and fraud associated with payroll.
Processing payroll through a connected workflow helps keep data secure due to the fact that it’s not being downloaded onto Excel spreadsheets and emailed to internal and client stakeholders. In addition, this new way of completing payroll means that information on Excel sheets cannot be changed or intercepted, which risks banking details or payment values being changed.
Additionally, payroll is one of the most sensitive data sets held by accountants. While data leakage can be overcome with password-restricted Excel sheets, this can slow down processes. Connected payroll overcomes the risk of data leakage by only being accessible to pre-approved users and is a lot more user friendly than password-protected spreadsheets.
Reduce the risk of human error
Connected payroll software reduces the risk of human error as well as enhancing automation and productivity.
These solutions pull in payments data and values from accounting software, removing the chance of accountants entering the wrong values on bank websites. This seamless data flow also means staff members can spend their time on more value-adding tasks and spend less time on the overall payroll process.
Accountants who already process payroll can relatively easily introduce secure controls within their existing processes, such as segregating payroll and using the Faster Payments network. However, incorporating a connected payroll system which has features incorporating all of the above, will allow accountants to really scale their payroll service while maximising security and ease of use.
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