Outdated processes mean large firms frequently pay staff incorrectly or late

Three-quarters of large companies in the UK process payments incorrectly or late due to the continued use of manual data entry in the payroll process, according to research.

The survey by HR and payroll provider MHR, found that the worst offenders accounted for nearly one in ten of all large companies. They confessed to paying employees either late or incorrectly over 12 times in the last year.

“Worryingly many are still using outdated manual processes for gathering and inputting data resulting in an awful lot of people suffering from incorrect pay,” said David Crewe head of service operation at MHR.

““This can have a profound impact on people, not only impacting their ability to pay the bills on time but affecting their overall wellbeing, morale and productivity, which over time can force them to leave their jobs,” he added.

Over half of companies surveyed admitted to using spreadsheets, which are more susceptible to late payment issues. When asked why their organisations stuck with these methods that are open to errors and miscalculations, more than half of respondents using spreadsheets (62%) and paper (58%) said it was because it had always been done that way.

“With payroll professionals already facing many arduous tasks and under pressure to meet compliance obligations to ever-changing employment legislation, it’s inconceivable that organisations of this size can even consider doing their payroll manually rather than with a secure, automated system,” Crewe said.

“With Government plans to make tax fully digital already underway, the sooner organisations introduce new digital ways of working the better,” he added.

Indeed, a report by QuickBooks found that once firms got to grips with MTD they often experienced “spill-over benefits” as they became more open to embracing technology.

Perhaps, with the MTD deadlines now upon us, payroll will soon follow suit.