Across Australia, many employers are discovering that their reliance on out of date technology may be putting them at risk financially. New research has shown that over 80% of organisations are handling their payroll with technology systems developed 20 years ago or more. This statistic is alarming. What makes it even more concerning is the massive financial issues caused by this outdated software.
In 2019, Australian conglomerate Wesfarmers revealed a payroll error in the vicinity of $15 million. In addition, Wesfarmers-owned Bunnings also discovered a similar mistake in which it underpaid employees over an eight-year period. Wesfarmers is not alone. Michael Hill Jewellers, the ABC, Woolworths, the Red Cross, and others have revealed substantial payroll errors and underpayments.
This is becoming an epidemic of payroll underpayment across Australia, and it can be tied to the use of old technology which has not kept up with the various changes in payroll regulations.
The Risks of Underpayment
Australian employers are quickly realising the level of risk associated with these payroll underpayment errors. For example, upon discovering their mistake, Woolworths had to announce to investors their need to review 11 million payroll records, per year, going all the way back to 2010. In addition to the cost of the review, they will need to correct any and all staff underpayments.
How This Happens
In Australia, changes in payroll regulations are common. In fact, according to NGA Human Resources, the country’s payroll complexity ranks globally in the “above average” category. The list of sources for changes to payroll regulations is extensive and includes regional laws, the Fair Work Commission and Fair Work Ombudsman. With outdated software, it can become complicated, cumbersome, and sometimes impossible to keep up to date. The cost and time required to code custom software continually become cost-prohibitive, and some legacy software can’t be kept current.
The Simple Solution
Companies that don’t want to face the same trouble as Woolworths, Wesfarmers and others need to take immediate steps to mitigate the problem. Fortunately, the solution is as simple as investing in Retail ERP cloud platforms like NetSuite that have the following payroll features:
Continuous Updates to Meet Australian Regulations
Instead of worrying about whether your company is going to run into a payroll disaster, supporting a jurisdiction means that the product features and functions to ensure legislative compliance are actively maintained. This includes tax rates and scales, pension schemes, public holidays, reports, integration with the local tax authority and local support.
Updates Without Downtime
Another advantage of cloud-based retail payroll software is the updating process. With solutions like NetSuite, any customised components are carried over to the latest version meaning there is no need for time-consuming customisation. That means your business can always be on the newest version without continually stopping work while upgrades are completed.
Adapts Quickly to Changes
With a cloud-based solution, the vendor can make changes faster and get them included right away. Cloud computing with a single code base that utilise a managed version upgrade process can addapt quickly to changes and minimise disruptions.
Ready for Single Touch Payroll
Organization with Single Touch Payroll (STP) enabled software will enjoy a seamless transition to the new system that reports salary, wage, and tax information each time employees are paid.
NetSuite Guide for Retail
Payroll is one of many modules integrated into NetSuite, if you want to manage all your retail business areas with a single centralised cloud platform learn more downloading Klugo’s guide for Australian retailers.
Overpayment is Also a Risk
Payroll underpayment isn’t the only risk companies face. The right software can also help mitigate the risk of overpayment and fraud. Companies with poorly designed systems, protocols, and processes can be open to manipulation of their payroll. The best way to avoid this risk is to create secure processes, and that includes modern retail payroll software.
Security can be significantly improved and data loss can be prevented by moving to a cloud-based system like NetSuite. By using a platform like Infinet Cloud Payroll Build for NetSuite, you can keep everything secured by connecting directly to the Australian Taxation Office (ATO). With a direct connection, there is no need to worry about data being compromised while passing through another third party. With a robust cloud solution, you can also review the data that is submitted to ensure compliance and security.
Avoid Heavy IT Overhead Costs
As IT becomes increasingly complex and data breaches become more common, it is more important than ever to move away from disparate retail payroll systems. Connected ERP platforms like NetSuite give employees access to additional data like inventory, CRM, finances, and accounting. It allows for multiple permission levels ensuring employees have that information they need and nothing more. Since NetSuite Payroll system connects natively to all other areas of the business: finances, inventory, returns, supply, there is no need to coordinate different systems for reporting. This connectivity improves accuracy and, again reduces the chances of costly errors.
Assess Your Risk
If you want to avoid the problems faced by the companies mentioned earlier, take some time to assess your level of risk by determining if you face the following problems.
- Difficulty making changes to your system.
- The need to track all ATO initiatives and state regulations and recode your current platform to comply.
- Lack of meaningful reports from your system.
- Your payroll team still regularly uses a calculator.
- Your team needs to rekey data into multiple systems.
- You find yourself locked out of the payroll system during the updating process.
If you are facing problems like these, now is the time to change to a better Payroll platform like NetSuite for Retail + InfinetCloud Payroll Software.
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Feel free to call an expert in Retail Enterprise Resource Planning Systems today. Find out how cloud-based technology can make your retail payroll needs align to your omni-channel strategies.