The Consequences of a Bad Payroll
The Consequences of a Bad Payroll
Payroll is undoubtedly a vital part of what keeps a company running internally. It is the oil to the gears that keeps the business functioning. It can also be the rust that slows them down if not done correctly. A payroll department requires proper upkeep. It can not simply pay your employees for the time they have worked, it must also keep records of all it’s transactions, changes, everything must be recorded. When audits and tax seasons come around, a poorly kept payroll department could turn into fines and legal consequences.
This holds true with all areas of a business, but with payroll, where the handling of company money is it’s key feature, record keeping becomes even more vital. Done poorly, a company can lose track of it’s finances. It may believe it has more profit than it really does, because it paid an expense but did not keep proper record of it to refer to later. When it comes to tax time, they can be done quickly if recorded correctly. If not, they can become frantic, trying to figure out the amount that each employee made over the course of the year.
In case of an audit, poorly kept records can lead to an auditor failing a business, which can lead to hefty fines. An audit can often times be conducted randomly without warning. This means no time to put a companies records in order. Keeping proper records from the beginning eliminates this problem. When the auditor comes, you can feel confident that you are prepared.
Along with the business aspects of proper record keeping, it in general makes for a more tidy, and therefore more productive workspace. No one likes to work around clutter. When everything is neat and organized, a workspace can feel more spacious and welcoming. If you are not sure on how to keep a payroll office organized effectively, think about outsourcing it to a human resource company, such as Vision H.R.
