Lack of Automation of Payroll Among Many Mistakes Made by East African Companies

1
Nikki Summers
Nikki Summers, Regional Director for Sage in East Africa
Shares

Payroll automation firm Sage has been running its trade in the African market for an extended period. Amid its operations that serve several markets, including Kenya, Sage has managed to popularize the use of payroll software in organizations as a critical function for day to day operations. For instance, the firm reports that payroll automation has enabled companies to pay their staff on time to avoid low morale and degraded performance, as well as streamline company obligations. To this end, Sage reports that some East African companies have been subject to payroll mistakes, which can be avoided if they can get some basics right.

According to Nikki Summers, who serves as the Regional Director for Sage in East Africa, employers are mandated to compensate their workers on time, in addition to remitting PAYE each month. Failure to enforce this simple obligation has been cited for killing the morale of employees as a result of penalties filed by tax authorities. So, what can be done to alleviate or eliminate these mistakes? Well…

Workers need to be paid in a timely manner, at all times

Admittedly, many organizations in the East African region are facing a rough time, and when cash is short, it is tempting for affected companies to try to save some funds by delaying payment to employees or not paying them at all. However, it is worth noting that paying workers must be the top legal obligations to motivate workers and avoid wage unnecessary wage complaints.



“Plan to ensure your accounts have enough to cover payroll. Don’t forget about the promised quarterly or year-end bonus,” says Nikki Summers.

Payroll needs to be automated

It has since been determined that automation cuts payroll budgets up to 80 percent, primarily from reducing errors in paychecks and invoices. While several companies in the region have since digitized payroll services, a number of them still rely on traditional means that ignore compliance and strict financial regulations.

“Shop around for a cloud-based payroll solution that is 100%-compliant with tax legislation and regulations in your country, and that can grow alongside your business. f you opt for a cloud-based solution, you will benefit from paying for your software per user, per month, turning it into an operational expense. Plus, you’ll be able to get running quickly and benefit from automatic updates that ensure your software is up to date with the latest laws and regulation,” adds Nikki Summers.

Installing checks and balances

Some companies experience payroll fraud from time to time, including cases of ghost workers, timesheet fraud, and employee misclassification. These vices constitute a significant risk for small and medium businesses and can take a very long time before they are detected and dealt with.

“The simplest way to prevent most incidences of payroll fraud is to enforce segregation of duties in the payroll department. The people who calculate pay rates and accumulated hours for the payroll should ideally not be the same people who process the payments. Different people should have responsibility for capturing payroll data and for managing access to the system as well as adding and removing employees from the payroll. Yet another person could be tasked with checking that the numbers do, in fact, add up,” advises the Regional Director.

Lastly…

Companies must have good control over leave days


It has been noted that some East African organizations experience cases where employees accrue excessive leave days, which can be detrimental to companies. Both sides are often to blame when this situation occurs.

“An automated payroll system allows you to take the sweat out of processing leave. It enables you to manage leave administration, enforce company-specific leave policies, and ensure records are correct. You can also introduce Employee Self-Service to streamline the process of leave applications and approvals for employees and managers,” finalizes Nikki Summers.

Shares

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.