Top Payroll Accounting Challenges Entrepreneurs Must be Aware of
Payroll accounting generally involves the calculation and distribution of salaries, wages etc. to certain agencies and company staff. It also involves issuing reports to company management, so they’re informed regarding company labour costs and payroll expenses. Even though it is one of the most vital functions of accounting, most companies find payroll accounting challenges. Most of them leave it to the HR departments instead of outsourcing to accounting firms in Dubai.
Oftentimes, this would result in an increased burden on the in-house team, leading to grave errors. Inefficiencies inherent in the system also leads to payroll fraud and mismanagement. Most of such challenges can be minimised with the help of accounting & bookkeeping firms in Dubai. Here is a list of payroll accounting challenges every entrepreneur should be aware of:
1. Use of Conventional payroll system
By conventional payroll system, we imply the use of manual payroll systems that rely on a great deal of paperwork. Such an outdated system could be tiresome for your team and poses the risk of errors and fraud. With a manual system, it is tougher to share any kind of reports or information within the organisation. Also, it is practically impossible if you desire to keep a backup of such vital data. Switching into an automated payroll system is highly recommended to circumvent the challenges posed by a conventional system.
2. Non- compliance with laws and rules
Businesses must ensure their finance department complies with the rules and regulations in the UAE. The team that look after the payroll system must be aware of the UAE tax laws and other related compliance requirements such as employee regulations. This will make the accounting team calculate the salaries and wages properly, completing the regulations. They must also keep themselves updated about any changes made to the laws from time to time. Any negligence on your part could lead to hefty fines and penalties. The best way to minimise this risk is to outsource the accounting function to the best accounting firms in Dubai, UAE.
3. Confidentiality and privacy issues
As the world witnesses more and more technological advances, the threats to data security also rise. A data breach is nowadays one of the gravest yet common challenges faced by businesses across the world. The payroll process includes vital personal information of employees such as bank account details.
Any type of data breach would adversely impact the business, leading to payroll frauds, financial malpractice etc. Companies can avoid such unforeseen events emanating from data leaks by implementing stringent privacy policies and limit the number of persons who have access to such information. Accounting firms in Dubai can help businesses by auditing the system to expose its vulnerabilities.
4. Delay in making payments
The payroll accounting process is time-consuming, requiring a great level of accuracy and zero-error tolerance in calculations. Companies may face delays in paying the staff due to outdated systems or relying on non-specialised personal. Payment delays could dent the staff morale and deteriorate their motivation. Depending on accounting companies in Dubai will make you tackle such challenges as they are a team of specialised professionals.
5. Increasing burden on the finance department
If you don’t have a separate payroll accounting team, other departments such as HR will have to shoulder the burden, which will affect their core functions. As a result, they will struggle to execute their tasks ( both payroll and their primary tasks) efficiently. Instead of relying upon the in-house team, the businesses can outsource the payroll accounting function to the best accounting firms in Dubai.
How can Jitendra Chartered Accountants Help?
We have listed here a handful of challenges that every entrepreneur face while dealing with the payroll accounting function. Outsourcing payroll function to accounting firms in Dubai allows an employer to concentrate fully on core business activities. Additionally, it frees up the entrepreneur or accounting personnel to focus on working on more strategic tasks that affect the bottom line of the business.
When it comes to hiring the best accounting companies in Dubai, look no further than Jitendra Chartered Accountants (JCA). JCA has more than 20 years of commendable experience in providing the best accounting services in Dubai to companies of all sizes. We have both big and small clients belonging to all kinds of industries. Apart from providing payroll accounting services in the UAE, JCA offer assistance in tax return filling, VAT registration, audit, Economic Substance Regulation filing, maintenance of Ultimate Beneficial Ownership registers etc.