Payroll- a Low Key Back Office Job or a Subject Matter Expert?
Payroll is firmly centred around quality. The knock-on effect of compromised confidentiality, hidden errors, lack of local labour law knowledge, poor staff attendance, overpayments and debt recovery, as well as internal conflict of interest to adhere to payroll deadlines, are too great not to get it right the first time.
Historically, payroll processing was viewed as low key and delegated to generalist, junior level office staff. Associated lower costs justified these arrangements and it was partially successful for repetitive and low decision-making processes. However, payroll is no longer a back office function for unqualified, inexperienced staff, as vital metrics, forecasts and budgets are now the drivers for measuring payroll ROI.
Employees manually recording leave balances, loan repayments, monthly variables etc. are a thing of the past. Today, there is much more to payroll than a procedures manual, accruals, benefits and salary calculations – all purely labour transactional processes. The value and importance of a well-run payroll is critical to and impacts corporate strategy. The Payroll function should regularly be reviewed for cost effectiveness, governance and best practices to minimise the risk to the company.
Recently, a company contacted us with a show-stopping payroll problem. In this case, they did not submit the relevant WPS (Wage Protection System) form on time when disbursing salaries. The office administrator who handles their salaries, although very reliable, was not able to interpret the payroll within the local labour law framework. This resulted in an AED10000 (approx. US$2700) fine. Resolving the issue was important, but the ongoing benefit was to put resolutions and controls in place to mitigate this risk.
In conclusion, when next reviewing the capability of your payroll, it is worth considering the merit of comparing in-house value vs. the benefit of letting experts manage your payroll.
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