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How Do You Avoid Making Payroll Overpayments?

When you make an overpayment of salary to an employee, be it former or current, it can cause financial strain on not just the business but the employee as well. This error is quite common but it can be hard to correct. In this article, we provide you with our key tips to ensure you are able to prevent this, as best as you can.

The process of payroll is very important, here’s why:

It is imperative that you have a structured payroll process in place along with effective training of payroll to ensure that accurate and up-to-date information is being portrayed. The monthly wage bill, of a business, typically represents its biggest expenditure and therefore it needs to be done correctly.

There will be changes in hours, pay and leaving dates for staff members that should be notified of and funneled into a systematic workflow process. Diligence is key where outbound payments are concerned and different checks should be in place to reduce the risk of human error. Furthermore, it is important to input any changes that have been made for the month into the payslip and checked back also.

Following on from the process, having good communication is also going to be imperative.

Having strong communication between different departments within your business structure will assist in the maintenance of a positive employer-employee relationship. Subsequently, if errors within your payroll process do occur this will make it plenty easier to discuss with the staff member whom has been overpaid before you take action to rectify this mistake.

Having additional personnel within the payroll process will further mitigate the risk of any mistakes as there are extra eyes looking over any changes that are being/have been made. If/when an error is spotted this will be made easier to communicate as well.

Finally, the efficiency of new technology can be extremely handy when it comes to quantitative data and should be utilised in your payroll process. A devoted payroll software will make managing your payroll more effortless and time effective because it will leave you with more time to make your finally checks before wages are sent to staff.

Not every business is the same so finding a system or software that works best for your individual business is going to be very important. Having backup systems in place is also going to be essential, in the case that there is an IT malfunction or security breach. You may wish to consider a third party provider whom will most likely be working with the latest technology and are able to keep a close eye on any changes in relevant legislation.

By looking into all three areas outlined above; process, communication and technology, you will be able to avoid any payroll problems prior to them occurring.

Guildways has extensive experience in recovering overpayment of salary from former employees therefore, if you are a business that has made an overpayment to an employee that you are finding difficult to recover, get in touch by calling +44 3333 409 000 or email us at [email protected] to find out how we can assist.

27 May 2022