It occurs at the same time every year, but the advent of financial Year End can still install fear into even the most robust of HR and Payroll professionals.
Mounting levels of pressure and stress can be compounded with urgent activities such as accounts to sign off, paperwork to complete and reports to collate. Add to this the often siloed worlds in which HR and Payroll teams operate, and you have a recipe for poor communication and impaired organisational efficiency.
Essentially, Payroll Year End marks the end of one financial year prior to starting another. Businesses may choose to start their new financial year at slightly differing times, but it must be broadly in line with the new tax year, so the usual months chosen for this process are normally April or May.
There are a number of tasks that need to be completed for a successful Payroll Year End to run smoothly. These include reporting to HMRC on the previous tax year, preparing for the new tax year, updating any legislative or regulatory changes that will impact workplace staff, and issuing employees with P60’s.
Year End can be complicated in many organistions, existing as an integrated process that includes the finalisation of purchase ledgers, the collection of financial and other data, calculations and adjustments, and complex reporting.
With so many process components, it is no wonder that Payroll professionals can face many challenges during this period of the year. Some of the most commonly cited include:
You may have already identified with some of the Year End pain points above, but whether your business can successfully overcome them or not is often the catalyst that forces organisational change. If you find that your company is frequently struggling with pain points, this may point to further warning signs that your processes need to change:
One of the main ways that Payroll teams can reduce the stress associated with Year End is collaborate effectively with their HR peers. By sharing knowledge, tasks and workloads, the approach of Year End can easily become a much smoother process than it may have been previously.
For example, sitting down together at the beginning of a new financial year, and planning out all important tasks and milestones for the year ahead could go a long way towards streamlining and improving your existing processes. Scheduling and allocating tasks across both teams is key, alongside creating a plan for all HMRC milestones, with internal deadlines set for the appropriate personnel.
You could also think about what information and data your HR team could be best placed to provide you with. For example, ensuring that a live update of leavers, new starters, promotions, salary changes and those on maternity / paternity leave is communicated either monthly or quarterly could really save time on key financial reporting tasks at the point of Year End.
The beginning of the financial year is also a great time to review the systems and tools that you use. Any paper-based or manual processes that are stressful or time-consuming could be replaced with faster digital alternatives. By keeping an open channel of communication with your HR team, you can successfully identify tasks and processes, whether manual or digital, that can be harmonised or aligned with your own, thus saving valuable time.
So as you can see, Payroll Year End needn’t be stressful! With appropriate forward planning, communication and collaboration between HR and Payroll teams, painful Year End processing and reporting can become a thing of the past.