For payroll professionals across all sectors, there’s no escaping the fact that the advent of the financial year end represents a period of time which can instil a sense of trepidation in even the most hardened pay teams.
The payroll year end finds the usual stresses and demands of the pay cycle compounded by various other deadlines and commitments such as recording P11Ds, noting any benefits or expenses, keeping on top of any potential tax liabilities and of course, running the year end payroll. Missteps in any of these processes can have severe consequences for organisations, with the threat of legal or financial repercussions a very real possibility, particularly when It comes to non-compliance with HMRC deadlines.
It goes without saying that each and every organisation will want to put their best foot forward in meeting their payroll year end. Unfortunately, many businesses can find themselves hampered at this critical time by outdated and inefficient systems, not to mention plagued by barriers in communication which can occur as a result of working in silos, which is often a hallmark of HR and Payroll. These factors can all come together to create the perfect storm wherein the payroll year end can actually end up costing businesses a significant amount of money.
We understand that the payroll year end is a significantly stressful period for your pay people, which is why we wanted to take a look at what steps you can take in order to ease some of the pressure of the financial year end and to ensure that your organisation is ready to meet your commitments in a compliant and efficient fashion.
What is the payroll year end?
To put it simply, payroll year end marks the transition point between one financial year to the next. Although the precise end date may vary from organisation to organisation, the final payroll for businesses must fall in line with the new tax year, starting on the 6th April 2022, hence most businesses running payroll year end through the months of April to May.
Payroll year end brings with it a multitude of tasks which must be completed in order to achieve a smooth transition to the next financial year. The chief among these being the various reporting responsibilities to HMRC, including end of year tax reports and issuing employees with new P60s. Another crucial task is the Earlier Year Update-making corrections to the previous year’s payroll. This is held to be one of the most complex and time consuming payroll responsibilities. On top of these usual challenges, the new financial year often heralds changes in legislation which organisations will need to keep on top of in order to ensure proper compliance. The payroll year end therefore represents a time for business grappling with the implications of regulatory or legislative changes and preparing to embed them within their working processes.
What are the biggest challenges that payroll year end brings?
Payroll year end is a universally challenging period for all organisations. Although the exact makeup of the stresses and struggles faced by businesses can vary, it is undeniable that preparing for the advent of the new financial year brings with it a host of logistical and legislative challenges. Payroll year end struggles are particularly pronounced among larger organisations, where a multitude of components come into play such as complex reporting and the collating of financial data.
So what are some of the key challenges facing organisations at the payroll year end
Increasing volume and complexity of data- As organisations grow, so too does the complexity of reporting required to remain compliant, not to mention the volume of data which needs to be gathered. This can often lead to organisations finding that their requirements quickly outstrip the capability of their existing payroll systems.
Shifts in business strategy- As business goals and leadership changes, this can impact pre existing reporting models or KPIs which can throw any end of year data collation into chaos.
Unforeseen costs- Every organisation has to be wary of the threat of financial surprises and at year’s end, ensure that any anomalous outgoings have been properly tracked and allocated.
Legislative changes- Payroll year end doesn’t just mean reconciling the past twelve month’s outgoings. For all organisations, it also heralds a time to prepare for the following year and any legislative changes which may occur. Failure to take into account changes to legislation, particularly regarding tax, can have a fundamental impact on not just your organisation but your people too.
Failing technology- The demands on your payroll teams are unlikely to become less complex overtime, particularly as your organisations grow. In the fast paced world of finance, organisations can soon find themselves hampered by disparate and outdated systems.
Lack of communication- Gaps in communication or reoccurring instances of departments working in silos, can have a knock on effect on your ability to effectively and accurately collate data for the payroll year end. A lack of effective communication between the exec level suite and the lower echelons of an organisation can see significant financial roadblocks occur, as well as piling on undue stress and anxiety on their payroll teams.
What’s the secret to a happier payroll year end?
First of all, if we’re to be honest with ourselves, it’s impossible to completely eliminate the stress and anxiety which accompanies the end of the financial year. Regardless of what industry you make your name in, it’s an unavoidable fact that processing your payroll year end represents a significant increase in the workload of your payroll teams.
What you can focus on however, is ensuring that your systems and processes are in a place you need them to be to ensure a smooth sense of continuity from one financial year to the next. A common cause of stress and anxiety during payroll year end is the hassle of collating data across a broad business base. In larger organisations which may be made up of dozens of disparate elements, this can mean that valuable time is lost to payroll teams who find themselves chasing up errant data.
Furthermore, teams and departments who find themselves working in silos may fall victim to the idiosyncrasies of the systems and processes which they use to capture data. A sense of continuity and cohesion will be absolutely vital in ensuring an accurate and seamless payroll year end and one of the key ways in which organisations can achieve this is by looking at ways in which their payroll and HR functions can speak more intelligently with one another.
The end of the current financial year also heralds the perfect opportunity to take stock of your current systems and processes and to take a deep dive into your working processes in order to identify any gaps which may hinder the running of your payroll year end moving forward. If you are finding yourselves bogged down by admin heavy tasks and manual processes, then it might be the perfect time to consider making the switch to a Cloud based HR system and upscaling your payroll solution.
Transforming your systems and processes also allows your teams to work in a more sympathetic fashion, scheduling and allocating tasks across the HR and payroll function in order to lighten the load for everyone. By leaning on new systems, your HR teams can more effectively parse and hone the information they pass on to the payroll teams, ensuring clarity and efficiency at year’s end.
Finally, by ensuring that your systems and processes are well embedded, you can introduce a degree of forecasting into your payroll year end, bringing teams together and planning key milestones and data points which need to be hit for the next year. This allows previously disparate teams to work collectively towards a goal and hopefully will go a long way towards reducing error incurred by a lack of communication.
There’s no getting away from the fact that your payroll year end and the advent of the new financial year is an extremely stressful time for your payroll teams. Fortunately, at Mitrefinch, we firmly believe in the power of new systems and technology to help you achieve more and eliminate the stress and anxiety which is so commonly associated with payroll year end.
With Flexipay, your payroll year end doesn’t have to cost you a single penny. Our system is here to help you navigate the myriad tasks which herald the advent of the new financial year. With Flexipay, there’s no need to spend extra money to perform a year-to-date reconciliation check; to file RTIE year-end returns; to start the 2021/2022 tax year or publish your P60s
Flexipay is the payroll system designed by experts within the field of pay to specifically tackle the challenges faced by pay professionals day in and day out across all sectors.
With Flexipay, you get:
Real time calculations – instantaneous gross to net
Super speed processing – from calculate BACs in under 20 minutes
Pay on-demand – employees can draw down earned pay as they need it
Reporting – building your own reports has never been easier
Employee on-line access – data, documents and payslips
Flexipay offers you the scalability and flexibility you need to completely transform the way in which you run payroll, capable of working effortlessly across multiple sites and pay grades. Whether operating as a standalone system or integrated with our Time and Attendance, HR and Access Control solutions to form a comprehensive Workforce Management suite, Flexipay helps you process payrolls efficiently.
Our solution gives you the comprehensive reporting, GDPR auto-processing and audit trail capability you need to have peace of mind that your payroll is being run accurately and in a compliant fashion month in and month out.
To find out more about how Flexipay can transform the way you run your payroll year end and ensure accuracy and compliance throughout the next financial year and beyond, get in touch with one of our friendly team members today.