No doubt that following the financially challenging years, we’re all feeling the pinch. Rather than crying over spilt milk, one method your company might save money in 2023 is to improve, optimize and automate your payroll processes.
If there’s anything you can do now, two years into the pandemic-induced economic crisis, streamlining internal procedures to guarantee your organization is receiving the most value for money should be at the top of your list. Continue reading for a list of payroll process optimization suggestions that can help you handle this aspect of your organization while saving you time and money.
What are the problems that companies face with the payroll?
Payroll, in general, refers to the procedure for ensuring that your employees are paid on time. But why is it necessary to optimize it?
Poor payroll systems and badly-design processes might wind up costing your company a lot of money. While manually processing payroll may appear to be less expensive at first look, coordinating data gathering, such as timesheets, takes time and requires experienced human resources. “Time is money,” as the saying goes.
Manual payroll processing exposes your company to the danger of human mistakes, which may result in a ton of issues. Consider the case where one of your employees, contractors, or business partners isn’t paid on time or receives an inaccurate paycheck amount. This might breed distrust and lead to a loss of faith in your company. In addition, this might lead to legal complications which are always best to avoid in the first place.
That’s why we are writing to you here from our experience with all the Payroll Process Improvement Ideas that we can propose for your system and business to thrive.
Check the automation ideas for the finance and banking industry.
When is the right time to implement one of the payroll process improvement ideas?
There are several factors that you might need to assess to have a solid answer. Here is a bunch of them:
How long ago was your payroll implemented?
With the huge technological developments as well as the economic changes taking place rapidly, you need to consider being up to date with regards to all your systems and especially the payroll one. 3-5 years are more than enough to have a major upgrade in your system to cope with the internal changes in the company like personnel expansion & regulatory changes. Also, the payroll system should be abiding by the tax regulations that change every few years.
Have you evaluated whether your payroll software matches your requirements?
We certainly hope you did! Requirements are pretty dynamic and in constant change. That’s why it’s necessary to assess your legal status, personnel number, and expansion plans if any, updated tax regulations, any changes in the organizational structure of the company, and/or hierarchy that might trigger some changes in the payroll system.
Do your employees have easy access to the payroll system?
Easier said than done! Employees have the right to have a look at their status within the company at any point in time and have full access to their benefits, salaries, compensations, reimbursements, rewards, etc.… That must be done in a secure way as it’s extremely sensitive and confidential data so no one should be granted access to such info except for his/her own personal data only.
Do all employees receive their salaries on the same day?
Some companies have different pay schedules for employees. For example, part-time employees might receive paychecks once a month whereas full-time workers get paid bi-weekly. Several pay cycles create more administrative work for payroll staff as well as exposure to more possible human error. By synchronizing all pay schedules, staff can spend less time processing paystubs and sending out checks.
Where is payroll automation within your current system?
Automating your current payroll setup, your employees’ salaries will be processed automatically, and any raises or bonuses will automatically be added to monthly wages as soon as a member of management has registered them in the system. Having an automated & digital system has an additional benefit that we can’t ignore.
Which payroll process improvement ideas should you consider in 2023?
- Robotics Process Automation (RPA) for payroll processing
Based on Automation Anywhere’s definition of RPA, Robotic Process Automation (RPA) is software technology that’s easy for anyone to use to automate digital tasks.
With RPA, software users create software robots, or “bots”, that can learn, mimic, and then execute rules-based business processes. RPA automation enables users to create bots by observing human digital actions. Show your bots what to do, then let them do the work. Robotic Process Automation software bots can interact with any application or system the same way people do—except that RPA bots can operate around the clock, nonstop, much faster, and with 100% reliability and precision.
If you’re still manually handling payroll using timesheets and paying cheques via several banking and processing platforms, then the automation for the payroll software is definitely for you.
Your workers’ salary will be handled automatically using the automated version of your payroll software, and any increases or bonuses will be added to monthly wages as soon as a member of staff registers them in the system.
And, while automating your payroll may appear to be a large commitment, trust us when we say you’ll enjoy the benefits in the short & long run when you start saving money.
RPA for Payroll: Use Cases
Although RPA is not a replacement for a payroll gross-to-net calculation engine (or other suitable software programs), it can be used efficiently in payroll if the procedures are manual.
Below are some extremely useful use cases for RPA in payroll:
- Calculation of salaries for new joiners and newly promoted employees.
- Accommodate payroll records changes like reimbursements for travels/medical/etc.
- Monitoring & executing payroll changes based on attendance/sick leaves/vacations.
- Automating resignation procedures to accelerate the closure of all documents & finalize the pending payments.
- Time record validation: On a daily basis, bots check for missing time entries for hourly employees and reconcile hours worked with budgeted hours. Discrepancies are then reported to responsible management, who are contacted the next day (when the previous day’s transactions are still fresh in workers’ thoughts) for a quick resolution.
- Loading earning and deduction batches: Outside of working hours, bots create batches and import them into a payroll system/module, allowing payroll experts to start their day with import tasks finished. RPA may also be used to do common validations at a fraction of the time it takes humans to complete the same tasks.
- Post-close (or pre-initiation) administration: Tasks that are typically completed at the end of a quarter or year, such as tax reconciliation and orphan payroll journal entries, are completed during or soon after payroll close. Benefit deduction report creation and auto reconciliation against benefit bills are two further “low-hanging fruit” options.
These examples do not automate payroll processing from start to finish, but rather focus on individual sub-processes. These use cases increase payroll professionals’ speed and accuracy while allowing them to focus on more human-centric tasks. These tasks include providing advising services to corporate partners and finance departments, as well as establishing more efficient and effective payroll systems. In the end, payroll specialists, like many other task-oriented experts, will be able to become actual strategic consultants.
The great thing about RPA is that it can be implemented in all sectors from telecom, banking & finance, consumer goods, IT, and many others. There are many interesting real-life case studies that can help with your research which cover almost all the payroll automation processes.
2. Payroll Integration with external Systems
Integrating your payroll processing system with time and attendance monitoring software is another approach to improve its efficacy if you’re going to automate your complete payroll processing system.
Employee time and attendance monitoring software, if you don’t already have it, helps you save money on labor by recording the amount of time your employees spend doing their jobs so you don’t have to.
This software can replace manual data input with data collecting via devices like geofencing-enabled mobile applications, real-time reporting that syncs employee data in real-time, biometric authentication, and contactless punches.
You’ll be able to process monthly salaries faster and more precisely if you integrate your payroll system with this software and bring the two together in one platform. You’ll also be able to utilize data analytics to evaluate staff productivity and determine exactly what tasks your employees are working on.
3. Stay up-to-date
Another way to improve payroll services and automation once you’ve automated your payroll process is to make sure you’re using the most recent version of the software. When programs are in need of an update, they might start to operate slowly, so be sure you’re not wasting any time (and hence money) by doing so.
If your payroll operations were previously automated, now is the time to upgrade to the most recent version of your program. Updates can also guarantee that applications work as efficiently as possible.
4. 24/7Access For Workers
One of the most significant things your software may have when it comes to payroll process optimization ideas is the ability for employees to access and update the system at any time of day. For entering information regarding sick days, vacation days, and — if your payroll software is linked to time and attendance monitoring — when workers are clocking in and out — a cloud-based payroll system that can be accessed anywhere, by anyone, is critical.
Your employees will notice more openness, which helps develop a sense of trust between management and employees.
5. Provide a Great User Experience
With the above in mind, it’s critical that your employees have a simple time navigating the payroll software. Nothing is more frustrating than a complicated system that is difficult to navigate for staff who aren’t familiar with the program. This will just waste time for both your HR department, which controls the software and your employees, who have more vital responsibilities to do.
If the payroll technology is going to be challenging for employees who aren’t as tech-savvy, be sure to draw up instructions on how to use the step-by-step payroll process and share them internally via communication channels. You might even arrange payroll software training classes, which you could refresh every few months or so as technology advances.
6. Make Your System Transparent
Is your system simple enough for all staff to use? Transparency is at the heart of the finest payroll improvement solutions. Make a concerted effort to arrange regular meetings to inform employees about all corporate regulations that influence payroll. Develop written resources detailing the knowledge for simple reference in addition to training. It’s also a good idea to put the documents on display around the office.
7. Constant Review
Last on our list of 2023 payroll process improvement ideas is to evaluate your payroll software on a regular basis to ensure that it is compliant with state and federal tax laws.
While keeping up with regulatory changes is a best practice in payroll processing, items can easily slide between the cracks. And, because laws are continually changing, your company might face legal action if it fails to comply with payroll tax obligations before you know it.
Some payroll software will automatically update to reflect any legal changes, but if yours does not, be sure the team in charge of keeping it up to date is. Failure to comply might be a costly blunder for your company.
Looking for RPA opportunities in other industries? See what benefits can automation in e-commerce bring to your company.
Payroll’s job is going to become more ‘human’ than it has ever been. Teams from payroll will be on hand to share insight, engage, and enlighten coworkers while technology such as RPA will handle the monotonous and administrative duties that currently consume their time.
Payroll, in our perspective, has had to be one of the most adaptable departments when it comes to change. As a professional, you’re always forced to comprehend and apply new laws under tight timelines, as well as to communicate them to workers and business stakeholders in relevant ways. In a world of rising automation and robotics, the analytical and communication skills required in this process are – and will continue to be – vital, offering a ‘human’ touch.
As more payroll teams see the importance of RPA, I believe we’ll see a movement in the role payroll plays within an organization, as well as a shift in views regarding payroll as a critical function that may provide strategic information.
Thinking about improving your payroll processes with automation? Please feel free to reach out to us for any support needed! Build simple, trial automation with our RPA consultants to try the RPA out.