Did you know that 1 in 5 American business payrolls contains errors?
Employees don’t just want to be paid on time; they want to be paid the right amount. Despite this, Ernst & Young reports that 20% of payrolls contain errors. And those mistakes can negatively impact the company and its employees.
According to the EY report, the correction cost per employee, when averaged across the leading error types, costs the business $291. Worst of all, government penalties incurred from compliance errors can be significant and have legal consequences.
For employees, late or short payments can lead to a loss of trust, which also can affect the employees’ productivity.
Businesses can avoid all these problems by automating the payroll process. By automating payroll, organizations can protect their revenue stream and the trust they’ve built with their employees. Still not convinced? Here’s why you should automate your business payroll.
Payroll errors can be expensive
Payroll errors cost businesses money. Besides the cost highlighted in the EY report, payroll errors come in many forms and affect organizations in many ways. Here are the common payroll errors and their associated costs.
- Late or unpaid taxes that result in fines and penalties.
- Miscalculations of overtime, which can lead to loss of employee trust, compliance issues and legal ramifications.
- Erroneous hours have to be corrected or added, leading to employee frustrations and budgetary inaccuracies.
- “Buddy punching,” where employees clock in on behalf of their coworkers, leading to employees being paid for hours they never worked.
- Employee misclassification occurs when wages are incorrect. This can happen due to errors in data entry or communication. Some workers may be paid more, while others may be paid less than their hourly rates.
These mistakes can hurt your bottom line and even contribute to employee turnover. However, small businesses can avoid these errors by investing in payroll automation software.
An automated system helps ensure accurate payroll. Employees receive the correct amount of pay on time, with all taxes and deductions applied correctly. Fingercheck’s payroll processing platform can quickly calculate deductions, commissions, overtime pay, and other factors that impact employees’ pay.
Automation ensures adequate recordkeeping
Employers are required to keep several years of payroll records, including pay dates, tax deductions, payment rates, and total hours worked.
The IRS requires companies to keep tax records for a minimum of four years. And the U.S. Department of Labor requires employers to keep payroll records for a minimum of three years. Failure to keep these records can subject you to compliance risks and hefty penalties.
Maintaining paper records can be difficult. You or your administrative staff must search, organize, and file records for each employee.
There’s also the risk of losing or misplacing important documents. You spend money on paper, ink and storage.
Payroll software organizes records. It also makes them easy to access. This is useful for audits.
Never worry about missing a payment
Another advantage of automating payroll is that you’ll never have to worry about missing a payment. When relying on manual payroll, it’s easy to make mistakes and miss deadlines.
Late penalties can be costly to your business and may even affect your employees’ trust. These problems become a thing of the past when you automate the payroll process. Fingercheck goes the extra mile to offer Pay-On-Demand and Next-Day Pay services.
Fingercheck’s On-Demand Pay allows your workers to access their earned wages anytime. This can make any day a payday — a critical step toward boosting employee morale and productivity.
Next-Day Pay is a feature that allows small business owners to pay their employees by the next day. This is helpful if you’ve missed your pay cycle date.
How Fingercheck can help
Fingercheck automates the payroll process to eliminate errors, save time and ensure compliance with regulatory authorities. Automate your payroll with Fingercheck and never worry about IRS notices. And don’t risk underpaying or overpaying employees.
Are you ready to work smarter, not harder? Sign up here.