In this month's technology column, Nick Southcombe responds to a question relating to payroll best practice.
How can our payroll department unlock best practice in their processes?
Accessing best practice processes isn’t a one-off, it’s an ongoing challenge to get the most value out of every business activity. For payroll departments, best practice processes go hand-in-hand with technology. Payroll professionals must continually scrutinise their processes for activities that can be simplified, standardised and automated.
In the past few years, we have seen an evolution in the payroll profession. Many payroll professionals have access to contemporary payroll solutions that minimise manual data entry and automate tasks thus eliminating risks and delivering maximum operational efficiency. It’s important for payroll professionals to continually examine why they do things that way and if there is a faster, better way offered by technology or by streamlining manual components of the processes.
The Australian Payroll Association (APA) defines best practice as “integrating and streamlining payroll systems and processes, helping to build efficiency and improve payroll and business outcomes”. Payroll professionals can do this by mapping their current processes and identifying gaps where productivity is wasted.
While this may sound complex, it’s as simple as monitoring and recording what happens during the average day in your payroll department. APA recommends using sticky notes or timesheets to record every task and the time taken to complete them. This allows you to create a timeline or map of processes that can then be scrutinised analytically.
It’s important to remember that you can’t improve what you cannot see and do not measure. Payroll must identify and measure the larger indicators of process efficiency, such as cost of payroll processing per employee, as well as smaller elements, such as time taken to respond to enquiries. Regular process reviews will ensure your department is always providing a productive and efficient service.
Technology to plug the gaps
Once you’ve identified process gaps, it’s necessary to source a solution.
There are four main areas you should consider when accessing payroll technology, and these are:
1. Data capture – Depending on your industry and workforce, you could stand to save time and money by reassessing the way you capture employee data. This could mean replacing paper-based timesheets with electronic forms, installing point-of-sale time and attendance devices or integrating data capture with security devices.
2. Communication – Consider how employees communicate with your payroll department. Can technology be implemented that makes it simpler for employees to make enquiries or to access payment advice?
3. Risk mitigation – Data integrity is mission-critical in the payroll function. If your process evaluation uncovers gaps that could put your data in jeopardy, it’s time to enhance security. Fraud is a serious concern for payroll professionals today; this is why it’s vital to minimise risk by eliminating areas of vulnerability.
4. ESS/MSS – Employee and Manager Self Service allows your organisation to have a single point of entry for all employee-related information. ESS allows employees to update many of their own personal details, while MSS allows line managers to fast-track enquiries and leave approvals for a rapid and accurate payroll process.
Many organisations do not have dedicated payroll staff but rather administrative or HR staff who are burdened with the payroll responsibility. Handing off non-core payroll activities to a specialist payroll organisation may be the better option for these businesses. A specialist provider can lower administrative costs while accelerating processes and assuring compliance.
As the central hub of employee-related data, payroll departments have the opportunity to add significant value to their processes. Frontier Software recently commissioned APA to research payroll best practice, and the results are compelling. To access your free copy of the eBook, visit www.chris21.com.au/bestpractice
About the author
Nick Southcombe is General Manager, Frontier Software. For further information phone (03) 9639 0777; www.frontiersoftware.com