How The Magic Payroll Button Really Works


ppm logo - Edited (2)

It’s time for a little trumpet blowing and foot stomping by payroll professionals.  Alarmingly, there are still so many managers and business leaders who think we have a magic payroll button that takes little to no skill to press. For some, the belief is that anyone with half an ounce upstairs could run a payroll! When something goes wrong, the question is raised “Why is it so hard!?”.

Sadly, it’s often the managers of the payroll team with this flawed perception.  They might serve their team and themselves well to spend a little time getting a new perspective on what I honestly and unbiasly believe is one of the most committed work groups in a company.  What other department stays as long as it takes through hell and high water to process an EFT file, again and again, without thanks.

Lets take a look at the diversity of knowledge a payroller is actually required to have… and how we get that seemingly magic button to work…

Service Excellence

We are expected to be consummate customer service representatives, with superior conflict management skills; responding to technical questions on the spot; remaining calm in the face of irate employees, who sometimes hit you with a tirade of swearing. We must be mind readers; hide our anger as we are treated as lower class citizens by people who think that God created us unequal; hide our laughter at the ridiculous requests; and empathise with the employee who needs their money yesterday because they can’t feed their kids or put petrol in the car to get to work.  We solve problems day in and out and its’ when we can’t, or don’t, that others in the organisation begin to hear about it.

Business Relationships

Payrollers liaise with employees, managers, the finance team, the human resources team, solicitors, workers compensation insurers, auditors, the Child Support Agency, medical funds, unions, employer associations, banks and finance companies, social security, superannuation funds and the taxation office.  These people and organisations make demands upon us and expect the same service excellence that our employees expect from us.  It doesn’t matter if we have a Service Level Agreement stating when we will respond to requests, because most of these relationships are bound by law and so are the timeframes in which we have to jump.

Time Constraints

Payrollers actually performing the payroll process are under constant stress during the time between the receipt of the input data, to the time the funds are transferred to the bank.  If we are lucky enough to have all the data provided correctly and on time, its a fairly calm payroll day, but that is not a standard practice in the world of payroll.  There’s usually a pretty tight timeframe, a whole list of queries awaiting resolution by people who won’t return phone calls and emails. Achieving a zero error rate demands a great deal of validation and questions.

Policies & Procedures

Apart from having to know the company policies & procedures intimately, there is usually a fair amount of time spent by pro-active Payroll Managers referencing policies or documenting and updating payroll procedures as innovations are implemented and best practices are discovered.

Employee/Industrial Relations

We have to be constantly mindful of the consequences of our actions on employee relations and foresee human resource management issues that may emerge, or are already in effect. Every interaction with an employee and every payslip is a potential ER/IR disaster if not managed well.  This is a top of mind issue for all payrollers.

Accounting Principles

In order for payrollers to competently process payrolls, we must understand accounting principles to effect many of the transactions we do in our standard day.  Debits and Credits run deep in the simplest of payroll general ledgers, multiplied by the complexity of organisations with numerous companies and differing cost account structures.

Advanced MS Excel

Ask any Payroll Manager what their major reporting tool is and the answer will invariably be MS Excel, so add advanced Excel to the list of tricks a professional payroller has.

IT Systems Administration

Unless you have dedicated reources for your payroll, HRIS or time & attendance system, many payrollers are tasked with this function.   Report writing in some payroll systems is an acquired skill from years of practice and often the only avenue for extracting decent data from the payroll system.

Project Management

At any time, there will be multiple payroll projects in the pipeline.  System upgrades, new EBAs, legislative changes to address and more.  Payroll Managers and their staff are juggling diverse management needs, moving target dates, sometimes a lack of resourcing, shifting management priorities and insufficient hours in the day to keep their projects from falling over.

Legislative & Industrial Framework

We are expected to have in-depth working knowledge of the endless legislation that affects the organisation: Fair Work Act and its’ predecessors, Workers Compensation by state, OH&S, Payroll Slips Regulations, Annual Leave, Long Service Leave and Public Holidays by state, Superannuation Guarantee Acts … phew!

There are those of us to have to be more than familiar with Sarbanes Oxley, Immigration Act, Australian and International Standards and the legislation surrounding corporate governance. Added to this is each of the Industrial Instruments an organisation works under. We must know how the binding legislation or award modernisation system works in with these awards and which bits count these days and which bits don’t.

Complex Taxation System

An absolute imperative is intimate knowledge of taxation for every possible payment type paid under every fathomable scenario. Payrollers contend with legislation, calculation and queries on income tax, fringe benefits tax, medicare, student loans schemes, GST, payroll tax by state…another phew! …and that’s not all of it.  If the business employs expats or has overseas operations then international tax issues become prevalent.

Remuneration & Benefits

Payrollers worth their salt understand Salary Packaging and its complexities. We have to, to apply it correctly in the system, tax it correctly and ensure the benefits are applied correctly.

Global Best Practice

It is expected that effective validations have been performed to minimise or eliminate errors.  It is imperative the payroll is delivered on time.  It is expected that it is 100% accurate. It must be time and cost efficient. Process and metrics must compare to global best practices.

HR/Payroll Analysis

On top of ensuring the company and statutory reporting is delivered on time, there”s those constant ‘little’ urgent queries. The ‘little’ queries that require considerable time investigating or pulling information to answer the original, simple question.  Then there’s the analysis, budgetting, forecasting, scenarios, cost impacts, etc that come with frequency, but never enough warning.

All of the functions and requirements listed above are only a part of the skill based that Payrollers must have to be successful in their roles.  Understanding a day in the life of a payroller may go a little way to explaining the personality of some of us as well.  Payroll people are renowned for being…let’s say frank… and that’s partly because a decent majority of us haven’t got time for flowery and fluffy. There’s so much work to get through and often we simply want the facts, the required outcome and a timeframe.  To achieve 100% accuracy, a service excellence rating to die for and a reputation to be proud of takes a wealth of knowledge, committed effort, resilience, many tears and mastering the art of juggling tasks and priorities.

In all of this, the only buttons that I’ve ever witnessed possessing some kind of magical powers are the shutdown button on my computer, the light switch button and the elevator down button at the end of a tragic payroll day.

If you have any questions you would like to raise personally, please email Louise Vidler at The Professional Payroll Manager.

© 2012 Louise Vidler T/As The Professional Payroll Manager.  All rights reserved.

All materials contained on this web site not otherwise subject to copyright of other parties are subject to the ownership rights of Louise Vidler T/As The Professional Payroll Manager. Louise Vidler T/As The Professional Payroll Manager authorises you to make a single copy of the content herein for your own personal, non-commercial, use while visiting the site. You agree that any copy made must include the Louise Vidler T/As The Professional Payroll Manager copyright notice in full. No other permission is granted to you to print, copy, reproduce, distribute, transmit, upload, download, store, display in public, alter, or modify the content contained on this web site.

Advertisements

15 Comments to “How The Magic Payroll Button Really Works”

  1. Wow. You have really changed my perception of payrollers. I mean, I knew the job was tough, but not this tough. All my respect goes out to you and all payrollers.

  2. Hmmmm.. possible that it is also practice globally .. cheers

  3. No-one has ever written so true words, very impresive

  4. Funny and sad at the same time to see payrollers share the same fate all over the world. I’ve been in this business for 12 years now and have taught myself to set priorities and say ‘no’ in a polite manner to keep control of the work pressure and keep the stress levels to a minimum. Thanks for sharing this!

    Remco
    Netherlands

  5. I’d perpetually want to be update on new content on this internet site , saved to bookmarks ! .

  6. Thank you, this article describes payroll professionals the world over. We are that forgotten race of psychics who look after everyone else and forget about ourselves. Well done!!

    • Thanks Tony! I am still amazed at the emotions stirred by this article. Keep an eye out for my next round, where I’m actually going to attempt to help people to change this with a series of innovations that may open the eyes of payroll “customers”.

  7. Fantastic article!!! I couldn’t agree more. Working in payroll is certainly an underappreciated job and viewed by managers, VP’s and finance people as a mindless job. However, I believe, from an employees perspective, it is the most appreciated and most important job in an organization. Too bad others members of our team team such as the managers, VPs and finance people – do not value its own payroll professionals.

    Maureen Repollet
    USA

  8. Your blog has made me think about an question from another context. This is completely rare when I change my idea about such questions but it looks that you’ve done it. The day has started with something new! Thank you!

    • No thankyou! We’ve converted one! There’ll be hundreds of thousands of happy payroll people.

  9. Thank you! So many people think we just press a button and are overpaid!

    Angela
    USA

  10. Excellent blog and as a owner of small company I lived thru the pain even I was not the accountant or payroll manager. To avoid those pains and last minute panics, we created a web based employee time and expense management system called PunchMyTimeCard that allows employees to enter time thru web. We got rid of excel spreadsheets flying all over the cyber space and arriving at the payroll manager’s desk at last minute or right before the payroll starts. The system allows company to publish the payroll policy and payroll process/rules containing payroll processing dates, cut off days for time & expense entering rule, approval process and what to expect if the company policy is not followed. The sytem allows employees to enter their time and expenses from anywhere and any time via web and after they submit, those information goes to thier managers for approval and after approval is done, those data wait for accountant to process for payroll and generating invoices. Please contact us if we can help you to improve your payroll process. Our tool doesn’t do payroll. Our accountant does. But, we are trying to reduce the pain by streamlining the payroll process and elimination the last minute stress.
    Please visit us at http://www.punchmytimecard.com we are also making this product available on mobile phone.

  11. What a great article! I have been in the payroll industry for 24 years in the United States, and so much of this holds true here, as well. Every day holds a new adventure in the payroll department. In addition to doing whatever it takes to get your employees paid correctly and on time, it takes a sense of humor to make it as a payroll professional. This is how you deal with those that think there really is a magic button!

  12. worth of reading your materials. Thanks.

  13. This is true also of British Payrollers, and, I suspect, globally.

    In my (46 years) experience of Payrolling everyone expects the Payroll to be produced, but few if any, have any realisation of what is involved.

    Jim

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: