The Do’s and Don’ts for End of Financial Year Payroll Preparation
End of financial year (EOFY) can be a very stressful time for any business, especially for Payroll and HR reporting teams. Increasing pressures and long hours are common occurrences in the final weeks leading up to 30 June. A 2016 survey conducted by Xero, a cloud accounting software company, revealed that business owners consider EOFY as an unwelcome and tedious task that they tend to put off, with 30% of respondents citing that reporting takes their time away from focusing on their core goals.
Although for many it’s not their favourite time of year, it’s something that all organisations need to ensure they are ready for. To try and keep the stress and overtime to a minimum, our Payroll Operations Director Kathy de Luca, recommended that Payroll and HR teams always keep preparation and planning as top priorities to ensure a successful submission.
“We all know that this is a stressful time and […] having a proper plan will alleviate that,” Kathy states. Having your payroll teams on board with one plan will help everyone through this time, and prepare the team for the upcoming financial year. But what steps can HR and Payroll professionals take to plan and prepare? Here are Kathy’s top 3 tips on the do’s and don’ts for EOFY.
1. Attend year end training
You don’t know what you don’t know, so to best prepare for the task at hand, training is always a good place to start. Year-end training is a good time for the team to refresh themselves on the process and get up to date with any legislative changes that need to be incorporated. It’s also important for new team members to understand the preparation plan in place so that the team can hit the ground running and complete all EOFY requirements before the deadline: “It’s a really busy time so we want people to be independent,” Kathy shares. “It’s important to have everyone on the same page”.
2. Communicate with your leaders, support teams, and customers as you start your EOFY preparation
EOFY is a team effort, and this extends outside of your HR and Payroll team. Let your leaders and support teams know what your plan is ahead of time so that they can best support you. For example, if your team will have to work on a weekend, have the Helpdesk team on board so there’s someone available to ensure the working weekend is issue-free.
For outsourced payroll, teams should start communicating with their customers early on, to ensure that all stakeholders know what to do well ahead of time. With everyone briefed in with plenty of time to spare, any misunderstandings or issues can be kept to a minimum whilst also allowing ample time to gather payroll data insights.
3. Review all your payroll data for the year and do trial runs
EOFY means going through 12 (sometimes 13) months of payroll data, so it’s crucial that any of the information being handles doesn’t slip through the cracks. Go through your payroll calendar to ensure all payments required to be reported within the current financial year are processed in time. Review overpayments, pay codes, tax numbers, and employee information so that the payment summaries are correct and files ready to be uploaded. Having a trial run with enough time before the deadline will help you and your team identify any errors in data that you can rectify before the actual run.
1. Don’t wait until the end of the year to prepare for year-end
EOFY reporting needs to be done at the same time as your organisation’s regular pay run, so it’s vital that the team stays on top of competing priorities for this time of year. “There’s a very small time frame between the last pay run of the current year to the first pay run of the next financial year to get everything done, so it’s best to really start early,” Kathy advises. “Starting as early as April will give you enough time to be finished before 1st of July.”
2. Don’t miss out on important legislative updates
Have you checked for any new legislation that could impact the data you are preparing for the tax office? To ensure that you and your team are remaining compliant with legislative requirements, it’s important to check if there is any new legislation that might impact your EOFY payroll and HR reporting. Leveraging the expertise of local associations such as TAPS acts as a safeguard to keep your knowledge up to date and reporting compliant. With the information that becomes available to you, you can review any legislative changes that you need to watch out for and incorporate them into your trial run.
3. Don’t forget to coordinate your team’s leave
Every person in the team needs to work together to get through EOFY successfully, so it’s important to be aware of everyone’s schedule. It’s best not to have any key payroll people on leave at this time, but some things can still happen, so don’t forget to have a contingency plan in place as contingency to keep the EOFY process moving.
By keeping these tips in mind, you can lead your team to a strong EOFY finish and even stronger start to the new financial year.
The post The Do’s and Don’ts for End of Financial Year Payroll Preparation appeared first on Ascender HCM.