Simplifying payroll for your people and performance
For most employees, they go to work, and their pay magically appears in their account each payday. Seems simple, right? But if you’re an employer, you’ll know it’s far from it. While disruption caused by the pandemic has calmed down somewhat, new ways of working have remained, with some workers in the office, some at home, and many working outside of standard business hours, creating more complexity for payroll.
Calculating the various salaries within a business each with separate employment agreements and different tax brackets can be complicated, but add into the mix changing elements like Covid-19 vaccination leave, sick leave, holiday pay, superannuation or KiwiSaver contributions, student loan, repayments and changing legislation - it’s no wonder payroll can become a challenging task for many organisations.
Manual processes hindering business still surprisingly popular, manual processes as part of payroll practices - like running a few numbers in an Excel spreadsheet, or manually entering timesheets - leaves the door wide open for human error. One missed calculation can have a significant domino effect. It also goes without saying that manual processes create more work for the payroll team – re-entering timesheet data, inputting leave requests, calculating superannuation and tax, and updating annual leave.
Our Seizing Advantage report highlighted that mid-market organisations are losing up to one and a half days per employee per week on manual or repetitive tasks, due to ineffective digital solutions.
For businesses with around 100 employees, this comes at an extra cost of roughly $2.78m(AUD) or $2.2million (NZD) per business, per year. So, how can you make sure your payroll systems are working smarter to create better business outcomes and freeing up time for more value-add tasks? Here’s a few things to consider.
1. Take stock of your processes and systems.
Even if you already have payroll software, it’s worth taking a critical look at how well it’s meeting your needs – something that may have suited you a few years ago may no longer be working well. An important and often overlooked function is the software’s capacity to adapt to legislative changes – is it automatically updated to include any new tax rates or legislation, or do you have to make those changes manually? It’s also worth assessing scalability. Will it provide the support and functionality you need as your business grows? The other area to look out for as you review your systems is how data comes into your payroll software. Is it being manually entered from leave request forms, or copied over from timesheets? Spotting where your team is still bogged down by manual tasks will help you understand if you can make more of your existing software or whether now’s the time to
shift to a new system entirely.
2. Get centralised in the cloud.
Many of the issues experienced during the payroll process can be addressed by a centralised system hosted in the cloud. A cloud-based platform ensures your data is stored securely and is updated in real-time, minimising manual and duplicate processes. Most integrated cloud solutions also come with a self-service portal for employees, so it’s simple to arrange leave, update details, see payslips and track other entitlements (all the while removing more admin work for your team). An additional benefit of cloud-based platforms is how it extends into other workflows within your business. As well as connecting payroll data to other Human Capital Management (HCM) functions, integrated cloud platforms can support you to manage your operational and financial data on one platform for a complete view of your business health.
3. Leverage your reporting.
Knowledge really is power and delivering up-to-date, accurate reports to management or investors is a core part of the payroll function, not to mention an important view of the success of the business. For what can be a painful and time-consuming task for the payroll team, a cloud payroll solution can make short work of insights or reporting – in many cases a click of a button will deliver real-time, customisable reports that provide payroll teams a clear and up-to-date view to help track trends, find errors, or spot opportunities for improvement. And, with an integrated platform, you can further connect data for a real-time, 360degree view of your entire business.
Payroll in both Australia and New Zealand is complex, and while that’s unlikely to change any time soon, what you can change is how you manage that complexity. Internal processes are the first place to look, but what will make the biggest difference is the capability and functionality of the solution you use to manage this important business workflow. There’s a lot to be said for streamlining processes and letting modern, intelligent technology do the hard work for you, so consider how a cloud solution could make payroll time simple and watch your team and your business reap the benefits.