September 8, 2021Payroll Support, Payroll Technology
A Secret Tool to Increase Payroll Efficiency, Accuracy and Compliance
Without regular evaluations and updates to keep the payroll process updated, a company can get sucked into a quagmire of tax and compliance issues, ultimately leading to audits and hefty fines for simple mistakes that fly under the radar. The creep of increased manual work can also plague payroll teams as they get too deep in the weeds to recognize opportunities for time-saving automations. So, what is this secret tool?
Investment in a Payroll Process Review Pays Dividends
It’s the Payroll Process Review. Many organizations following best practices subject their payroll process to a penetrating and comprehensive review regularly, even multiple times a year if events demand it. Especially after all of the wild pitches the pandemic has thrown at payroll, many previously healthy processes have taken multiple hits and been patched on the fly. It’s time to take a deeper look at what might have been missed during the patching process as regulations changed and payroll staff turned over. The payroll process review, during which a consultant examines the entire sequence of events that coordinates each payroll cycle from start to finish, is the payroll manager’s secret to keeping the process efficient, accurate and compliant.
If it Feels Like Something Isn’t Quite Right with Payroll
Anita Kulik, CPP, Consulting Manager for Payroll Services, says that “the main reason someone asks for a payroll process review is that there is something that is just not clicking within their process, and they are trying to understand what it is. They might not be properly staffed, or perhaps they are experiencing too many payroll mistakes and want to understand why.” In today’s climate of high turnover in HR and payroll departments, another reason might be that unseasoned new hires have been doing their best to run a process they are not yet completely familiar with.
Anita explains that the payroll process review begins with a seasoned consultant observing and analyzing the chain of events that comprise each payroll cycle to identify areas of compliance risk and data security while documenting the client’s process. The review concludes with a clear report of key insights that details recommendations for strategic improvements to increase accuracy and efficiency while reducing risk and manual work.
“One of the biggest issues we come across is that a payroll department is overwhelmed with manual processes, and they don’t have enough automation,” Anita shares. “They have features and modules that they are not utilizing, or they are missing important deadlines [because they rely on too many manual processes].”
Because in Payroll, Experience Matters
Anita says that because her Wise payroll process review experts have tuned-up or examined so many organizations’ payroll cycles, they have a unique perspective that helps them catch things a typical observer might not flag. “Maybe a payroll department is failing to complete pre- and post-auditing, or they are not keeping records. A lot of clients don’t have a backup plan, or they have compliance issues around regulations in different states. A lot of clients just don’t know what they don’t know. They need someone to come in and determine why these mistakes are being made.” The ‘not knowing what they don’t know’ is a common theme. Many times, it is simply a matter of imparting information and helping clients achieve a comprehensive perspective amidst the sea of critical details.
Gaining insight from an impartial consultant enables you to compile and implement an ongoing payroll continuity plan while reducing compliance risk and incorporating sometimes overlooked details such as compliant segregation of duty practices. Much of the value in a payroll process review is determining what your company is doing well, what you can improve on, and what is truly putting your organization at risk. Knowing what to fix, why it needs fixing and how to fix it brings focus and confidence to both the payroll team and the process.
Is Your Payroll Process Documented Accurately?
One of the core tasks of an internal payroll processor is the creation and upkeep of documentation detailing processes. Yet Anita has observed that 1 out of 5 clients she works with do not have proper/complete/up-to-date documentation on file. “Aside from continuity, proper documentation helps you compare where holes and gaps are and ensures you have documentation that isn’t outdated,” she states. “These documents can also be used as a training tool for new hires.”
She recommends that companies review their documentation frequently to ensure that it is up to date and of optimal accuracy, a task that Wise consultants perform for clients. Anita highlights several scenarios most organizations face at some point or another: “What if you switch payroll and time/attendance systems, or you change your frequency of pay? What if you acquire another company?” She advises that you should “update your important process documents once a year, or whenever a major event happens.”
Regular Reviews of Your Payroll Process Mitigates Risk
Many companies expose themselves to compliance risks as a result of poor documentation. Anita notes that the threat of fraud is often the greatest. “You cannot set yourself up as a company to be exposed like that,” Anita warns, “regardless of company size.”
Complications from COVID-19 have made companies even more susceptible to compliance issues as employees work remotely, affecting taxation processes and payroll compliance. This shift means that payroll processors must have a plan to prepare for and react to potential issues which could bring about an audit. It is difficult to overestimate the importance of proper documentation in keeping a company up to date and functioning in full compliance during an unprecedented and chaotic time.
Reach Out to a Team that Knows Payroll
Throughout the pandemic, Wise consultants have conducted many payroll process reviews for clients. Our team makes recommendations and can also provide support and guidance while payroll teams implement the best practice updates and strategies to operate at optimal efficiency moving forward. Your company’s payroll process is a core component of maintaining employee satisfaction and continued organizational success. Working with our payroll professionals to improve your payroll accuracy, efficiency and compliance is a wise investment. Contact us today to schedule a consultation.
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