Across all potential costly issues faced by businesses in UAE, an effective payroll function is an organization’s first and most important line of defense. Not only will it protect from damaging penalties or fines, but it can also take businesses away from legal repercussions and reputational consequences.
How to Minimize Risk Related to Payroll Processing
In order to keep issues related to payroll and HR at bay, it is crucial for a payroll team to engage in these best practices:
When a business lacks real-time visibility for its processing of payroll, it won’t be able to implement processes that are necessary. The processes will ensure accurate and timely payments to employees. There also has to be transparency when it comes to the relevant rules and daily data issues.
Achieve a unified warehouse for payroll data. All processing standards and data are to be organized properly, centralized and controlled by a single system. Doing so will enable your business in gaining all-important real-time visibility.
Have a firm compliance oversight
Regulatory or legal guidelines related to payroll in UAE change constantly. Without having monitoring procedures and proper controls, compliance rule changes won’t be applied to company systems immediately and accurately. In mature payroll departments or through payroll outsourcing in Dubai, compliance-related updates and changes are monitored constantly.
The monitoring is also done in a proactive and structured way. They are then applied to the payroll systems in a systemized and timely manner. A payroll team has to be effective at revisiting compliance tracking processes and self-audit its adherence to the applicable statutes. This is to keep authorities from questioning a company and uncovering problematic issues.
Engage with an accountable partner
In-house processing teams for payroll can often be quite difficult for small businesses to maintain. Large corporations are also already busy being heavily burdened with the daily responsibilities of addressing employee queries. Not to mention the implementation of last-minute administrative requests. When all the payroll management obligations fall on the internal team and its already long to-do list, staff members can get stuck with their routine. you will notice problematic trends and even raise a red flag with the authorities regarding wage issues.
Engage with a payroll processing outsourcing firm in Dubai or anywhere in UAE. They don’t only offer compliance services as they can also help your payroll team with its overall operations. Having an experienced partner for payroll processing can allow you to allocate even more bandwidth to strategic activities. The ones that help your organization achieve a lot more positive outcomes. Through payroll outsourcing in Dubai, you can also have a shorter payroll cycle.
Poor Payroll Practices Your Business Should Avoid
As there are best practices for payroll processing in UAE, there are also poor practices that cause issues to a business as a whole. The most common ones are the following:
Retaining an incorrect setup
Payroll is very complicated, most especially as the wages of the employees for employers based in UAE are to go through the country’s Wages Protection System or WPS. Policies for payroll processing in Dubai and the rest of the emirates are difficult for most to understand. They’re also subject to change as we mentioned earlier.
If you are handling the payroll processing on your own, you’d want to ensure you are fully up to speed with the amounts that are to be included in calculating employee wages. If there are amounts that have to be withheld (either mandatory or voluntarily), you also have to keep accurate records. This is why it is necessary to set up an effective payroll processing system. This huge responsibility can be taken from your shoulders with payroll outsourcing in Dubai.
Being late with payroll
Most small businesses forget payday. This is understandable as they often wear many hats. However, this is not good at all for your business. Not only will your reputation get hurt, but you will also incur fines and penalties from the local authorities.
It will be an excellent idea to consider getting outsourced payroll services in UAE to avoid the issue. With payroll outsourcing in UAE, you can fully concentrate on the daily activities associated with running your business.
Poorly maintain records
Payroll has to be fully integrated into the overall accounting system. Why? This is because it affects the cash flow directly. It is imperative that you exactly know the amount that you have that’s liquid to cover payroll checks.
Miscalculating employee wags
You really don’t need your business to get caught paying employees the wrong amounts. It does not matter if it is too little or too much. However, it usually happens with clerical errors. Employees can also make mistakes when logging their time. The solution to this is having a payroll system with checks and balances.
For an effective system of processing payroll in Dubai, call us here in Payroll Middle East today!