Managing Payroll Risk

Payroll Risk are the areas within the payroll function that can either cause payroll failure or payroll errors.  A recent review byt the New Zealand Payroll Practioners Association found the following areas to be where most payroll risk comes from;

  • The wrong payroll system has been selected in the first place for the type of work environment (without payroll SME’s being involved).
  • The payroll system has not been setup/configured correctly.
  • The payroll practitioner does not understand how their system is calculating standard legislative and agreed calculations or cannot explain easily to a third party how they are being done or even show it.
  • How the system has been setup and the decisions made have not been documented at the start or ongoing as changes have happened.
  • The relationship between the employer and payroll supplier is one sided (the supplier controls the relationship).
  • Ongoing checks and testing of payroll are not been undertaken.
  • If challenged by an employer or external government agency payroll cannot easily show what they are doing is compliant and the issue can become a risk to the employer’.

One of the benefits of using Ezypay though is that we manage this Payroll Risk for you and for all the steps listed above we have processes in place to ensure all these risks are eliminated or minimised.  One item we feel is missiing from the above list though is lack of a backup payroll person.  Many companies just have one payroll person and no backup person in place.  When this person is away sick or on leave then there is the real risk of complete payroll failure, so make sure your company always has a backup payroll person fully trained up.  Here at Ezypay we have five highly qualified payroll professionals on hand so you are guaranteed Continuity of Supply.

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