Is your payroll running smoothly?

Working with a new profile client in the childcare sector this past few weeks, the issue of payroll compliance became a new layer we focussed on for management systems of all our clients.

The Business Monitor Review raised a number of red flags and when we dug deeper, with an iMonitor Risk Assessment, we found areas in payroll management that could have caused the business huge reputational damage as well as ongoing legal issues.

Once corrective action was taken, the need for stronger risk management protocols understood and then risks re payroll and entitlements added to the Risk Register and the Risk Management Procedure the business could continue without fear of historical issues causing chaos.

In summary the in-house payroll manager had resigned, and a new appointment was left with a number of unresolved issues around employee classifications, Modern Awards, tax and entitlements, mismanaged data backups and poor security levels.

Payroll is a function that should run smoothly in the background of your business but there are  major risks that could go horribly wrong. Every business must have tools and procedures in place to mitigate them. Outsourcing to a specialist provider is a solution but does not abrogate the ultimate business responsibility.

Regular audits of the procedures and practices, whether in-house or externally provided, diligent monitoring of ATO notices and other legislation changes with regards to Modern Award entitlements, superannuation, leave entitlements as well as the correct classification of workers is essential to ensure you don’t have a hidden issue waiting to pop to the surface.

We have, over the past 18 months dealt with four clients whose hidden payroll missteps could have brought their businesses to their knees. None were intentional and all corrected thanks to the owners/accountants reading about “someone” else in trouble and deciding to book a Business Monitor Review.