Every procedure should be up for assessment
Within an organization, payroll plays a crucial role. Not only must payroll professionals pay employees correctly and on time, they must also ensure that their organization remains in compliance both federally and provincially, often including the intricacies of union and organizational policies.
The environment in which businesses operate is rapidly changing. Economic and demographic pressures, as well as other internal and external forces, have organizations examining how best to maintain their strategic focus.
One way payroll can contribute to broader organizational goals is through a payroll process overview. It provides an opportunity to ensure tools, technology, and processes are as efficient and effective as possible.
In a department like payroll, this is important. Often, once the fundamentals of paying employees correctly and on time are in place, the payroll budget includes little more than enough for annual fees and licences.
As time passes, though, things can change. For example, an organization may implement a new policy that allows employees to bank their overtime and take it off later. As this was not part of the original setup, payroll team members may find it easier to work around the system by tracking the banked time manually or in Excel.
This can be time consuming. Not only does payroll have to collect and maintain the information, it also has to reconcile it and report it to the employees and their managers. In addition, having to re-key the data introduces a higher risk of errors. Annually reviewing payroll workflows provides an opportunity to identify and correct inefficiencies like this.
A payroll process overview maps out current processes, both electronic and manual, as well as internal and external, to identify workflow streams and create detailed process maps. This will help payroll departments determine if they need to redesign any of their processes.
Team members can start by documenting and mapping in detail the current processes and flows internally within the team and then expand the review to include external touch points within the organization and to technology partners.
Tracking the information flow from “point to point and person to person” provides multiple opportunities for process improvements, as author Dave Foxall points out in an article on payroll process reviews on PayrollLab.com. It can pinpoint bottlenecks, duplication, redundancy, and even payroll processes prone to error.
When conducting a payroll process overview, it is important to take the time to understand workflow streams. Ask where and how the flow of information from point to point can be simplified, automated or if it is even required anymore. Just because a process has always been done a certain way is not a good reason to continue doing it. On the other hand, to implement a change for change’s sake could cause more harm.
In an effort to create better, more effective and efficient processes, every procedure should be up for assessment and examination. Involve the payroll team right from the start and encourage them to be creative in solving the challenges, recommending business improvement, and even championing a new process.
Besides improving workflow and helping to ensure that tools and technology are as effective as possible, a process overview offers other benefits. These include building improved lines of communication, encouraging collaboration between business units, providing opportunities for learning and training, and uncovering hidden talents within the team.
A payroll process overview may also bring to light procedures that involve other departments. It is a good idea to identify and include stakeholders from the departments, including HR, finance and management, for additional collaboration and transparency, as well as providing a forum to review current practices and highlight future opportunities.
Bringing information together assists in identifying gaps, opportunities, and best practices from forms, data entries, and data imports and exports, to change management, training, and implementing new features, functionality and automation. Knowing what areas the organization would benefit from the most enables payroll to collaborate with other departments and external technology partners to scope out how they can help.
When carrying out a process overview, payroll does not have to do it alone. Leverage the expertise of payroll’s technology partners when tackling workflow streams to automate processes and provide best-industry practices and features. When mapping the processes, interdependencies between departments and roles, like payroll, HR, health and safety, training, finance and more come to light, as well as opportunities for integration and simplification.
As part of redesigning any of the processes, there are several factors to keep in mind:
• Begin by considering current, as well as any future, organizational goals and initiatives so new processes align smoothly and seamlessly.
• Include impact on budgets and ongoing subscription fees.
• Communication and change management initiatives are vital before, during, and after implementation of any new process to ensure that all stakeholders know what is happening and are comfortable with the changes. Ensuring that all stakeholders are engaged and onboard as part of the process will assist with change management, accountability, and success.
• Timing should be carefully considered when redesigning processes. Internally within the team, it is important not to implement changes when payroll resources are stretched extremely thin, such as during the last and first payrolls of the year right through to the completion of T4s. Managers should also take note of life events and even vacations that may affect implementation. There are also external factors to consider, be it other department interdependencies or an organization-wide project.
• Define what success looks like right from the start and as each milestone is reached, regardless of how large or small, celebrate and recognize the accomplishments of everyone involved.
Any changes initiated from the payroll process overview will require time to stabilize and produce results. In some cases, especially within the team, a new process reducing duplication of data and errors could realize results quickly and free up valuable resources.
Other projects may be better tackled in stages — whether by department or region or even by access. For example, in an effort to promote an organization’s green initiative, HR may decide to work towards paperless employee files and payroll may opt to produce and deliver pay statements and T4s electronically. To do this, the departments would review best practices from various technical vendors to consider a web or mobile self-service offering.
Continuously reinvesting in the payroll process offers many opportunities for the payroll team, the department, and entire organization. It will reap rewards every single time by confirming which workflow streams are working and driving better, more effective and efficient processes to save time and free up valuable resources.
Implementing additional technological features and maximizing functionality improves the return on investment to the organization. Improving data flow either with data integration or with even more efficient data synchronization improves data integrity and provides better reporting analytics. This not only enables payroll to become a more strategic partner in the organization, it also provides exciting opportunities.
Gladys McCoy is a solution specialist at Avanti Software, a Canadian company that helps organizations manage their HR, payroll and time and attendance with an all-in-one solution.
