Over the past few years there have been significant changes for payroll teams to absorb, resulting in a squeeze from all sides.
- Legislative pressure: RTI and pension auto-enrolment.
- Management pressure: Demands for faster processing and lower costs.
- HR team pressure: Compensation is key to employee engagement, expanding benefit and total compensation landscape.
- Business pressure: Demands for more data, more insight and quicker payroll turnaround.
Payroll teams have had to sometimes work smarter but often work harder to meet these extra requirements.
One area particularly squeezed is the time spent reconciling and checking the payroll run before the BACS and FPS files are sent.
The introduction of RTI has limited or made more complex some of the workarounds that may have been used in the past to rectify incorrect payments.
So today there is less time for the checking of payroll and if something is missed it’s more difficult to put right. Once payroll has been run, identifying problems can be like searching for a needle in a haystack.
- That one big overpayment.
- That mistake that a manager made via self-service when not completing a transaction properly.
- That typo where the decimal point was in the wrong place.
With little time and a tight deadline it can be very difficult to catch all of these, especially the smaller mistakes.
Recovery of money from employees, the accounting of it, and RTI resubmissions are complex. These all add to the payroll team’s burden, leading to a cycle of decline in the quality of the service. More time is spent dealing with over- and underpayments and less time checking and ensuring the quality of the payroll.
The net result is that the payroll team becomes reactive rather than proactive.
There are generally two approaches to ensuring the payroll is correct: auditing all transactions or checking the results of the payroll calculations.
Auditing works fine on a small payroll with entry by a few named HR and payroll individuals. But this approach can begin to break down where self-service is deployed, where there is a complex HR landscape or where the volume of transactions is high and there simply isn’t the manpower to double-check everything.
The second option is a complex checking and reconciliation process or tool. These may be custom reports, a data warehouse may be used or more than likely a combination of things, including standard reports such as gross to net, exception reports (high/low values, variance), employee results summary.
Standard payroll reports come out in a variety of formats, some more difficult to use than others. They are very static, it’s not easy to compare periods or employees, and often the standard reports don’t provide any contextual information.
More than likely Microsoft Excel will be used to stitch these things together, but this requires more time to be spent manipulating data and with the potential introduction of further errors.
The other important factor during any payroll reconciliation is local knowledge. There is so much history, culture, custom and practice in the heads of a payroll team that for a new person into the team it can take an age to truly get up to speed.
- How do we share that local knowledge?
- How do you ensure consistency?
- How do you find the needle in the haystack when the clock is ticking?
- How do you save your company money and provide payroll insight to your business?
These are all the questions we looked to answer when developing the Claremont Payroll Control Centre. If you’d like to find out more then please call us on 01483 549 004.
Click here for our Payroll Control Centre datasheet.
Click here to read more about our Payroll Control Centre product.
Adrian is responsible for the delivery of all things from a HCM technology perspective. Developing add-ons to E-Business Suite and Fusion Applications as well as consulting, managed services and providing strategic advice to a broad range of clients. Adrian’s role is to ensure that Claremont’s clients get the best possible return when using any of Oracle’s HCM suite of products.