Most people would be surprised by the amount of work it takes to process payroll and get paychecks out on time. Adding to the stress of general payroll duties are common problems such as relying on outdated systems, lack of organizational support and manual processes. Nobody understands this better than payroll professionals that have to balance heavy workloads with tight deadlines and a small staff. Often times, payroll teams are also tasked with additional administrative duties, making it even harder to get everything done correctly and on time.
Fortunately, there are ways you can streamline payroll processes so that even a small team can manage the needs of a larger workforce. Here are five changes you can make that will make your payroll workflow less stressful and more efficient.
Align pay schedules
Do you have different pay schedules for hourly workers and salary employees? Having multiple payroll periods for different groups of workers within your organization can seem like a good idea initially, and may even make some administrative functions seem easier. In reality though, maintaining multiple pay cycles often just creates extra work for your payroll team. By simply aligning pay cycles you can streamline your entire payroll process, create efficiencies, and even reduce errors.
Manual processes are never as efficient as their digital counterparts. When it comes to tracking time however, this is even more true. Relying on employees to manually track start/stop times is cumbersome and error prone. Those errors can also lead to overpayment of hours, which is time consuming to fix. It can also lead to underpaying hours, which may create a compliance issue. Digital time tracking makes it easier to track hours, fix mistakes and create reports related to critical payroll information.
Create a detailed, step-by-step payroll checklist
It doesn’t matter if you have a seasoned team of payroll professionals, having a process in place is essential. One component in your process should be a bulletproof payroll checklist. This should include every step in your process along with common problems that occur, like missing or incorrect pay codes. By making this an official list that your team checks off throughout the process, you are far less likely to make mistakes by either error or omission. Depending on your process, you may have people sign off or check an task off when it is complete to help ensure everyone is on the same page.
Create an all inclusive payroll calendar
What payroll activities are coming up next week? Are there any filing deadlines coming up that you need to manage? Is everyone on top of your payroll tax deposits schedule? Keeping a payroll calendar will prevent missed deadlines and the resulting compliance issues that may arise. This should include regular payroll activity related to pay cycles and quarterly/annual events that need attention. Make these readily available to everyone so they can stay on track and keep each other accountable.
Automate & allow self-management where possible
How much of your time is spent managing employee information? How about the time spent handling basic data entry for timecards, direct deposit information or managing PTO requests? For many companies, this type of work accounts for a large chunk of the day, especially if you hire part time, contract or seasonal employees. You can free up a lot of time by switching to a system that allows your employees to manage their own information, like updating tax withholding or changing their home address.
Additional areas of automation included handing PTO requests, submitting employee direct deposit information and digital time tracking. This might be tied to your payroll software or service, so making this change may require a larger conversation.
Last but not least, remember to make continuing education a priority. Laws impacting payroll and benefits change from time to time, making ongoing learning essential. Don’t leave it up to chance, however, make it official. Create a learning plan for your payroll team that includes learning about updated laws, talking about internal processes and sharing tips for efficiency. Consider including your HR team as well, since there is a great deal of overlap between these two departments.
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.