Payroll horror stories: mistakes scarier than ghosts!

A sinister chill hangs in the air.

As autumn nights draw in, things that go bump in the night are on our minds.

However, some of the most terrifying tales don’t come from haunted houses, but from the workplace.

I’m talking about payroll horror stories!

A simple mistake can unleash terrifying consequences, leaving you with a mess that would make any ghoul shudder.

So, gather close as we unearth some of the most chilling payroll mistakes and tell you how you can avoid them.

Story one: social engineering scares

While scammers may not be as terrifying as a chainsaw-wielding villain, they can spell disaster for businesses.

In our first story, we begin with a seemingly innocent email.

It arrived in the payroll manager’s inbox, same as any other day.

The sender? Their Managing Director (or so it seemed).

The email was marked ‘URGENT’, with the Director frantically explaining they were about to board a flight and needed an immediate, one-off payment sent to a new supplier.

Attached was a perfectly legitimate-looking invoice, complete with new bank details.

Wanting to be helpful, the payroll manager acted quickly.

Days later, the real Managing Director casually enquired about a payment they were expecting.

Confused, the payroll manager mentioned the urgent transfer that had been made earlier in the week.

A dreadful silence followed, then came the chilling words: “I never sent that email.”

The realisation hit like a cold wind – the email had been a carefully crafted social engineering scam designed to exploit trust.

How to avoid these scams

With the rise of Artificial Intelligence (AI), these scams are becoming increasingly sophisticated, making even the most cautious among us vulnerable.

Here’s how you can strengthen your defences against these clever scams:

• Double-check everything: before taking action, always verify payment change requests or urgent payments. Social engineering scams often use urgency as a way to make you rush into mistakes. If you get an odd email or message, call to confirm. If it’s a call you’ve received, send a confirmation email or chat message. Also, don’t forget the golden rule of always avoiding suspicious links or attachments.
• Self-service: payroll professionals can take further precautions by integrating their payroll and HR systems. The integration means data is shared between the systems without the need for manual intervention and features like self-service mean employees can update their own records, meaning no more ad-hoc requests for details to be changed.

Story two: awful admin

I’ve one word for you: admin.

Argh!

Now, I imagine you’ve jumped out of your skin just at the thought of admin and all its associated stresses.

Our customer, Angel Trains, was in the same position.

Chika Eze, HR Advisor at Angel Trains, joined the company just under two years ago after working at a much larger organisation.

Despite the smaller workforce at Angel Trains, she was surprised by how time-consuming and error-prone payroll processing had become, telling us: “Running payroll each month was an incredibly manual process.

“We had no visibility of payroll, and there were frequent mistakes, which meant it took a very long time – we had to check every individual’s payroll each month due to the high risk of errors.

“It took longer to do payroll for 160 employees than it had taken at my previous company, where we had over 1,000 employees.”

The inefficiencies quickly became unsustainable, prompting Angel Trains to seek a more agile and reliable solution.

Reliable solutions 

Using good payroll software is like having an extra pair of expert hands.

It automates the repetitive, time-consuming tasks that often lead to mistakes, such as calculating pay, tax and deductions.

Alternatively, you can follow the path Angel Trains took and outsource your payroll.

Chika commented on their experience: “There were a lot of reasons we chose IRIS Payroll Services. 

“We could integrate our HR system, maintain a managed service, and gain full visibility via the employer portal.

“We could see changes in real time, run reports whenever needed, and our payroll advisor was very responsive.”

Story three: data distribution disaster

The next story focuses on data distribution, in which the poor participant was organising their Christmas party(is it too early to mention the C word?) and made a huge error.

When organising the Christmas party, they accidentally sent out the final payroll file to the entire Christmas party invite list.

Horrendous!

Possibly one of the worst things they could have done. 

Horror stories like these, unfortunately, aren’t too rare and are reminders for us to ensure the necessary security measures are in place.

Putting safety measures in place

Before you send any information, always ask yourself:

• Has the correct file been attached?
• Are you sending it to the correct distribution list?

To take this a step further and fully safeguard your data, use a cloud-based payroll software to help store and distribute information securely.

Features such as password protection ensure accurate and secure data distribution – even if data is sent to the wrong person, without a password, the file remains safe.

Access controls within the cloud payroll also ensure only authorised personnel can view, edit and download sensitive information, reducing the risk of data breaches.

Additionally, integration between HR and payroll also helps minimise risk because changes to employee information are reflected across all systems without human intervention, removing the need for sensitive employee data to be manually sent.

Claire Dawes, Payroll Manager at The Fed, tells us: “We’ve really noticed the difference since bringing in a centralised HR and Payroll system, with one screen to manage everything from.

“We got so used to having to do things on spreadsheets and adding attachments, and there were so many things that we, in the HR and Payroll teams, just couldn’t control.

“Staffology has given us that control back, and as a result, we’ve been able to make improvements for our employees.”

Story four: looming legislation  

Here, our unsuspecting payroll manager is tasked with navigating the labyrinth of payroll legislation.

The laws and regulations twisted and turned like a dark maze, constantly changing, leaving them in a state of unease.

Not only are there regular updates to things like National Minimum Wage (NMW) and tax codes, but the Labour Government’s Employment Rights Bill (ERB) is also going to bring a seismic shift to the UK workplace.

Notable changes from the Employment Rights Bill include:

• Ending zero-hour contracts
• Tackling fire and rehire
• Fairer flexible working
• The Fair Work Agency
• Strengthening Statutory Sick Pay (SSP)

Peyton Inglis, HR Consultant, IRIS Software Group, commented: “Whilst much of the detail is still to be confirmed through the introduction of secondary legislation, the message to employers is abundantly clear.

“There will be new legal risks for employers to navigate a more assertive enforcement regime, increased administrative demands for businesses & HR professionals and greater protections for workers.” 

Finding a trusted supplier

Navigating the world of payroll legislation may seem like a nightmare, but it doesn’t have to be!

Good software providers, like IRIS, provide automatic updates to support legislative changes, ensuring customers are always compliant.

Alternatively, for those who lack confidence managing payroll compliance, we suggest you explore outsourcing options.

Payroll outsourcing providers, such as IRIS Payroll Services, have CIPP-accredited payroll specialists, so you can have complete confidence that your employees are paid accurately and on time while ensuring full compliance.

Here’s IRIS!

They swing the axe back.

Bang. Bang.

The axe smashes into the door twice.

Our scene now cuts to the payroll manager on the other side of the door, screaming.

The axe swinger puts their head through the door and says: “Here’s IRIS! Wait, why are you screaming? Please, stop panicking – I’m here to help with the payroll nightmares. Okay, the axe may have been a bit over the top, but I think you’re overreacting.”

If you are concerned about your payroll or are currently struggling with your own horror story, look no further.

At IRIS, our award-winning payroll software and payroll outsourcing service are on hand to support, helping keep the ghouls away so you can rest easy.

Learn more about our offerings here.