XBert: 9 ways bookkeepers can make payroll compliance easier

Any payroll bookkeeper will know – it’s more than just a list of people and the wage they’re paid. Keeping on top of payroll compliance including individual tax information, bonuses, overtime, sick days, leave requirements and holiday pay, not to mention compliance with regulations like Single Tough Payroll, is an arduous and time-consuming process. Of course, this has become easier thanks to payroll software products like Xero, QuickBooks and MYOB offer. However, important information can still be missed, or data can take hours to sift through. And that’s where XBert steps in.

9 XBert risk alerts that will help you with payroll compliance:

• Employee Superannuation checks

• Junior Employee Birthday

• Employee Details Missing after Payrun

• Employee Long Service Leave

• Employee Long Service Leave entitlements missing

• Monthly Employee Leave Balance Warning

• Monthly Employee Super Contribution check

• Superannuation Liability Payments

• Employee Annual Leave setting incorrect

Junior employee birthdays

This can be an easy one to miss. A junior employee has a birthday – which entitles them to pay increase. Unless the client informs you of the impending birthday, it can be easy to fall under the radar.XBert will check across employee details and flag when a junior employee is about to have a birthday, so you can check the relevant rate of pay or agreement and ensure the correct pay rate is set as prescribed by the agreement or award. Not only does this save you hours, it helps you be proactive and further impress your client.

Employee details missing

Let’s say our mate Billy has started employment with your client, ACME Bikes. After 28 days, he still hasn't provided a TFN document. In accordance with the Australian Tax Office rules, Billy's tax rate is changed to 47% and his net income is reduced from his normal weekly amount. Payroll adjustments can be made, but it's complicated and time consuming for you. Billy also hasn't provided his preferred superannuation provider details for payment of the required superannuation guaranteed amount. Instead, payment is made into your business' default fund provider. Billy then asks for his superannuation to be paid to a different fund. There are now two funds with contributions made on his behalf, and a third party needs to get involved in reallocating those funds correctly. Neither instance is irreversible, but it does cause unnecessary work. XBert will ensure you catch any missing employee details, in real time and can address with the client before you’re forced to do hours of rework for Billy.

Long Service Leave

Even though employees can't access their long service leave until they complete 10 years, in most cases, employees are entitled to pro-rata payments on termination after a certain number of years. This is normally 7 years in the majority of Australian states and territories, with the exception of NSW, where it’s only 5.XBert will help you stay on top of the Long Service Leave requirements by flagging if an employee has been with a company for a certain period and has no long service leave allocation on their entitlements.

Excessive accrual of annual leave

Accrual of annual leave has the potential to put your client’s cashflow at risk. Should one or more employees resign with a stockpile of holiday hours to be paid, the resulting payout could set their working capital back by a considerable amount. Similarly, multiple staff may ask for extended periods of entitled leave at the same time. If they aren't able to satisfy reasonable requests for holidays, it can cause disillusionment amongst the staff and could impact morale across the business. Not only will XBert will help you advise your client when any employee is accruing excessive leave, it will also help you stay on top by running alert notification on the first of every month, to get the leave balance for each employee.

Superannuation requirements

Superannuation - another time-consuming part of payroll. Superannuation Liability Payments can be particularly problematic. For example, if an employee with omitted leave entitlements and has been paid salary or wages, you may be required to backdate and correct payroll and accrual journals to correctly report financial liabilities. Conversely if the employee takes holidays and you are not correctly managing employee leave entitlements then you risk mismanagement of the business liabilities. XBert will check across all active full time and part time employees, and flag if no leave has been set up, saving you the time, stress and rework. Similarly, superannuation guarantee payments must be made to complying funds or retirement savings accounts by the quarterly due dates. Some super funds require employers to make contributions monthly. Sometimes, things happen and those dates can be missed. If you know you're going to miss the due date for lodging an SGC statement, you can ask the ATO for an extension of time to lodge. You can also ask for an extension of time to pay. This request must be made before the due date, in writing, stating why you need an extension. Nominal interest will continue to accrue until you lodge.Our XBert will flag to show you what the expected superannuation liability payment will be, to help you stay on top and advise your client accordingly.

Annual leave settings

Something as simple as the incorrect setting in your payroll software can wreak havoc when it comes to outgoing staff. Some accounting systems set, by default, all leave types to be ‘not paid out’ on termination and therefore this could simply be an administrative oversight. However, payroll systems use this flag to determine if the annual leave due is paid out on a final pay calculation and therefore does not accrue additional leave based on the amount of leave hours to be paid. Let’s say Bob from Acme Inc has set up the payroll before you take over their books. Acme Inc which employs a number of people all who are entitled to annual leave. Bob was not aware that the payroll system applies a default of "Not to pay out" to all leave types unless specifically set in the employee leave setup. Now you’re left to clean up the mess. XBert will cross check the data and let you know if the leave it set to not paid out. Then, you can simply go in and check and resolve if need be. If you're looking to save time, and remove rework from your vocabulary, start a free trial with XBert today.