Creating a Payroll Knowledge Base

“Ask yourself who uses what you do and how valuable to them is what you do.  Then ask yourself whether they recognise themselves as your customer.”  Anonymous

Note: I have attempted to eliminate usage of country specific names and terms for ease of reading by a global audience.

 A knowledge base, for those that haven’t seen one previously, is exactly what it sounds like: a base point where knowledge is stored, to be accessed by those who need to understand information, requirements, policies, procedures and so on.

If you are in a large organisation, there has probably been a great deal invested in the design and creation of an intranet to service as a knowledge base for all the business and support units.  Smaller organisations may not even have an intranet, in which case your knowledge base can be provided in print format in the form of Employee Handbooks, New Employee Packs, Information Handouts, Administrator & Manager Guides to Payroll and internal Payroll Operations Manuals.

Why bother?

Our first reason to bother with a knowledge base is to provide service excellence.  Organisations invest millions and go to extreme lengths to implement customer service policies and programs for their external customers.  These same organisations espouse strongly their commitment to their most valuable assets: their employees, but what level of human effort or monetary investment is contributed to providing decent customer service to internal customers?  For payroll teams, these internal customers are the employees you pay, the management you report to (hierarchically and the provision of actual reports) and the dealings you have with all other people that “touch” your payroll service.

You’ve all heard the maxims: Fore armed is forewarned; Knowledge is Power; You can’t manage what you don’t measure.  A good knowledge base will contribute to organisational effectiveness and work as a response to each of these maxims.

As you read through the article you will come to understand how a well thought out, constructive knowledge base, that is marketed well, can also significantly impact each of the following:

• Building the payroll teams’ knowledge and capabilities
• Improvement of payroll efficiency, compliance and integrity
• Contribution to the minimisation of Error Rates
• Provision of value added services
• Empowerment of payroll team members, employees and participants in the payroll process
• Provision of transparency in the payroll process
• Contribution to the protection of intellectual property and business processes
• Assisting in the building of  business relationships
• Contribution to the credibility of the payroll process
• Highlighting the complexity of the payroll process
• Education of your customers on the importance of compliant data inputs
• Reduction of your daily reactive fire fighting activities and a turning of the tide into pro-activity

Who are we supposed to serve with a Knowledge Base?

A knowledge base should service the payroll team, all contributors to the payroll process and our multiple customers including the employees we pay, the managers we provide reporting to and the other support units of the organisation including the Finance and Human Resources teams.  Depending on the size and diversity of the organisation, additional support units could include departments that specifically handle Workers Compensation, Corporate Governance, Statutory Taxation, Payroll Accounting, IT or Payroll Systems Administration and others.

For the benefit of simplicity, we will focus on our primary customers:  employees, managers and administrators of payroll information.

How complex does a Knowledge Base need to be?

Stick to the KISS (Keep It Simple Stupid) principle every time.  The less complicated a knowledge base is, the more it will be accessed and utilised.  The volume of content you place in it will be driven by the degree of complexity in each payroll or business and the extent of employee benefits the company provides.

What information could employees possibly want out of it?

Ask yourself what problems your employees commonly have.  What are their primary concerns and challenges in the payroll process?  How can you help?  You can build enormous credibility by pin-pointing and addressing your employees’ pain points.  The provision of information that benefits employees and assists them to make informed payroll decisions and transactions, shows that you are empathetic to them and focused on servicing them.

The first place to look for employee pain points is to analyse your most consistent payroll errors and queries and establish what the constants are.

If, for example, you are consistently baffled by the inability of employees to correctly complete a tax form, then this is a must have on your knowledge base.  In Australia, the tax file number (social security number in the US) declaration form has an information sheet attached explaining how to complete the form, but there are always the same issues presenting themselves by employees not completing the forms correctly.  Additionally, if an employee submits their form incorrectly, by law, we are to interpret it using the worst case scenario which can result in taxing the employee at the highest marginal rate.  Living by this rule is easy enough from compliance and processing perspective, but it causes great personal grief to employees, which is then imparted onto the payroll officer handling the aggrieved employees query.

This can be resolved simply, with the introduction of a document on your knowledge base titled “Understanding the Tax File Number Declaration”.  Within the document, an explanation of how the taxation will be applied by certain answers and what the implications will be of not providing a tax file number within the required time limit.  This simple task reduces so much grief and calls employees to action, as it is in their highest interest not to be taxed half of their pay.  I have seen in the US, it is common for employees to misunderstand the W2 and W4 forms, this can be resolved by explaining the difference between, and the importance of, the two forms.  If you need the explanatory note to be a little more “in your face”, attach it to the front of the relevant forms in the New Employee Packages or have it pop up online prior to them accessing the relevant online form.

The key to providing information that calls for action is to use minimal words, maximum impact and the strongest motivators.  Remembering that many people are visual beings, include pictures!  There’s not a lot you can do about the auditory beings, but technology might assist in that one day.

In Australia a few years back, salary packaging was extended by legislation, to all staff of hospitals and charitable organisations, in an attempt to counteract the low award wages and attract people to the industry.  The biggest issue that came out of this though for employees, was the impact the seemingly attractive salary packaging had on their student loans, child support, child benefits and any other welfare payments they may have been claiming.  Employees took up the salary packaging option without realising that it increased their assessable income for all of these other aspects of their lives.  Once the end of the financial year arrived and they started submitting their tax returns, all hell broke loose.  People were being assessed on their ordinary earnings, plus the grossed up fringe benefits and finding they had been overpaid social security payments and were underpaying student loans and child support.  These industries are full of university graduates and also sadly have a high percentage of welfare recipients, in comparison to other industries.  It was chaos.

To counteract this for the future, a guide titled “Understanding Salary Packaging” was introduced to explain these issues and each employee had to sign that they had read the guide prior to taking up salary packaging options.  In the guide, there were massive STOP signs and warning symbols to highlight the potential issues for them.  We provided little tips on how to circumvent future welfare or student loan debts, by explaining how to contribute extra tax to account for the salary packaging impacts.

Another constant query is new employees asking when they will be paid, which should be addressed in induction or orientation programs, but can be added to your knowledge base.

In your knowledge base, include explanations for employees on “what if”, “how to” and “what do I do” scenarios for the common pay queries:

• What do I do if my pay is short
• What do I do if I haven’t been paid
• What do I do if I lose my pay card
• How to change your bank details
• How to apply for salary packaging
• How to apply for leave (and leave payments in advance)
• Why have you taken garnishees or child support out of my pay without telling me
• How to complete your timesheet correctly (and preferably legibly)

The pay office is the first point of call invariably, and in most cases we have to redirect the employee back to their supervisor or bank or other area to establish some key facts first.  Minimise these queries, by including the steps they should take, such as talking to their supervisor about incorrect pays as the first step so they can ensure the timesheet was correctly submitted in the first place.

Incorrect bank account details can cause serious headaches and can be addressed with a simple explanation note on the bank details form, or by having employees attach a deposit slip or cancelled cheque to the bank form for verification.  When payments are rejected from bank accounts, it causes distress for employees and wastes valuable time that payroll officers could be utilising adding value to the payroll service.

Once you’ve established some vital information on your knowledge base that serves to eliminate pain points, go above and beyond and provide information that further empowers them, such as:

• Contact details for the pay office, taxation departments, medical funds, superannuation providers, etc
• Every single form an employee may need to access in their employment lifetime
• Updates on legislative or procedural changes that directly affect them
• New employee packages that explain what they need to know and do (and when they will get paid)
• Nice to know information from superannuation funds, medical funds, employee share schemes, etc
• If membership of any third party creditor comes with additional benefits, let the employees know (such as discount offers, insurance offers, etc)
• Handy website links to government schemes or aide programs affecting your employees (in Australia: Paid Parental Leave, Lost Super, Centrelinks’ Emergency Assistance lines for employees suffering from environmental or personal emergencies and so on)
• A listing of the coming years’ public holidays
• Details of your Workplace Giving Program and why they should be a part of it
• An invitation for feedback or ideas from your employees

What Information Would Managers Want?

Again, start with your pain points – yours and theirs.  Whatever causes grief, can be addressed by arming the right people with the right information.  From my experience, I have learned that these are the kinds of things that Business Managers want from payroll:

• No noise or fuss (just get it done correctly, every time, and don’t cause me any fuss in the process)
• A miraculous discovery of how to halve payroll costs (good luck with that one!)
• Advance notice of any potential IR, ER, HR (and many more R’s) issues that may arise through payroll
• Assurance that employees are paid compliantly
• Assurance that the correct number of employees are being paid from the payroll system
• Correct allocation of all costs associated with the payroll
• Assurance that the correct amounts are paid for income tax, superannuation, payroll tax, workers compensation insurance, fringe benefits tax, etc
• Assurance that correct termination entitlements are paid out to employees
• To spend less time on payroll processing and payroll queries
• To reduce the overall cost of payroll production
• Accurate calculation and accumulation of leave liabilities
• Timely reporting of significant dates (i.e. probation review expiries, special anniversary dates, etc)
• Advance notice on legislative changes that will affect future payroll costs
• Budgetary comparisons
• Overtime, Absence and other payroll costs as a percentage of total payroll costs
• Assistance with salary reviews via the simplest feedback system possible
• Information of absenteeism that enables them to pinpoint people and favourite days and see the cost absenteeism is contributing to their bottom lines
• Workers compensation reporting for submission of annual earnings data to insurance companies
• Workers compensation reporting on highlights of current workers compensation payments
• Key employee statistics (average age, years of service, mgt to production ratios, etc)
• Payroll Issue or Error rates of business units (Name this report carefully in order to build business relationships)
• If you are a Shared Services Business or Payroll Outsourcer, management want to identify ways to reduce the payroll processing fees (which you can counteract with brilliant service options to again increase them)
• Effective head count reporting that provides:
  • an overview of the company divisional allocation
  • exact reporting of total employee number
  • alert management to non paid employees left sitting on the payroll
  • alert management to ghosts on payroll
  • highlight volume of new employees and terminations
  • show turnover rates

These are just a few of the things that management want from you.  All you need to do now is start answering these needs one by one.  Your goal is to understand the management teams’ WIFM – “What’s In it For Me” and create reports that are “decision drivers“.  If you haven’t already, learn about Business Dashboards and provide key metrics and statistics that management can easily interpret to know if action needs to be taken to implement improvements.

Talk to, and listen carefully to your management team and learn what information can be provided in value add reports that can drive their operating costs down.  If management discard your expertise at the outset, create the reports and deliver them anyway and managers worth their salt, who understand the numbers, will begin conversation themselves and your reports will come to have some impact.  Ensure you don’t send volumes of information out, as it won’t be welcomed.  Stick to short, sharp numbers and brief highlights of what the information is telling you (i.e.: Absenteeism in Department X is 78% higher than all other departments) to elicit calls to action from management.  The business should welcome your attempts to open discussion about improvement areas.  Word your highlights carefully, as you want to maintain and improve business relationships, not create enemies.

One major consideration in the gathering of data for management reports like these, is the ability of your payroll or HRIS system to extract the data easily and how you present the data.  If you know Microsoft Excel fairly well, you can create some great reports from pitiful payroll data extractions.

How Can We Serve Providers of Payroll Inputs With A Knowledge Base?

The key to providing a completely correct payroll service is the quality of the data inputs coming in to the process.  This information alone should be enough to convince you that the payroll team should partner with every contributor to the payroll process to ensure the quality of the inputs.

Help yourself by helping the administrators of payroll information to understand what the requirements are by giving them a guide that steps through the process from their perspective.  Outline the deadline requirements and explain in simple terms how it should be done.  Not everyone that processes timesheets for a business unit understands the complexities of payroll or industrial agreements.  They only know what they know, and that might not be enough to allow for a seamless payroll process.

Information in the “Administrators Guide to Payroll Processing” should also include helpful items such as:

• Contact names and numbers of people they can reach for help
• Payroll processing deadlines (including shut down periods and public holidays)
• Frequently Asked Questions to enable them to handle simple payroll queries as the first point of contact for many employees
• “How To” instructions on common issues or queries that they should be addressing
• Identify common errors and omissions from administrators and let them know the impacts these have on the payroll process (nicely)
• Any other information that impacts the quality data being delivered by them to the payroll team

What Other Information Would Our Customers Want?

To find out what your customers want to know, there are two simple steps to take.  Firstly, you ask them!  You can ask your employees, managers and other customers what information would help them and then work to provide it.

Sometimes, people do not really know what product or service they need, but have a problem that needs a solution, so secondly, you listen to them.  Listening to your customers should be a systematic, daily process that is built into your personality, let alone your daily functions.  One persons’ anguish or confusion could result in another valuable piece of information that many others could utilise.

Building a Knowledge Base for the Payroll Team

To achieve our end goal of providing a compliant, correct, on time payroll, we need to arm our Payroll Team with the knowledge they require to achieve that end goal.  So many payroll teams operate from disjointed processes that usually vary between payroll officers.  They’ve collected bits and pieces over time and invariably the loss of a payroll officer from the team also results in a loss of valuable knowledge of the intricacies of the process.

To ensure the preservation of organisational knowledge and the competence of your payroll team as a whole, invest your time in collecting, documenting and publishing vital information such as:

• Documented payroll processes, checklists and deadlines
• Orientation or induction program contents
• Master forms used in the payroll process
• Policies and Procedures relating to payroll processing
• Legislation and Employment Agreements/Industrial Instruments that relate to your organisation
• How To Guides (How to Calculate Tax on Termination, How to Pay Upon Death of an Employee, etc)
• Tax rates and calculators that you need to perform all of your tasks with
• Links to helpful sites that provide additional information
• Answers to everything they need to know to serve your customers at their best

How Do We Actually Get People to Start Using the Knowledge Base?

Once you’ve created your knowledge base, the next step is to ensure you drive people to use it.  You have to promote it and refer people to it regularly…  If people ring with questions, you can refer them to the knowledge base on the intranet (or a document that you can email them) and walk them through it.  Over time, this will encourage people to use the knowledge base as their first point of call, until the time comes when your queries start with this conversation – “I’ve just searched the knowledge base and I couldn’t find any information on …”

Encourage your own team to utilise the knowledge base by eliminating all other sources of personal notes and individual processes and holding your payroll teams’ knowledge in the central knowledge base (in print or online format).  Every time someone has a question, a chorus of voices should either say “It’s in the knowledge base!” or “That needs to be in the knowledge base!”

Let’s Get Started Then…

To assist those of you following this series, I’ve opened a conversation on the Linkedin group “The Professional Payroll Manager” and welcome questions, comments or suggestions on the discussion board, so we can all work together to improve our global payroll world.

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.

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12 Best Practices to Totally Transform Your Payroll World

My recent articles have aroused passionate discussion and poignant feedback from the payroll industry globally. Overwhelmingly people claimed that payroll as a function is held in low esteem and many who perform the often-thankless task, are not deemed professionals by those that employ and manage them.

Crystal balls and magic payroll buttons aside, the question left at the end of the day is “How do we turn the tide?” Well here’s how! If we utilise all of our previously unobserved knowledge to deliver first-rate value add products, services and insights for employees, business managers and other stakeholders, there will be a paradigm shift. Guaranteed! People will begin to acknowledge the complexity of payroll and come to value the true worth of our knowledge.

Mahatma Ghandi said “Be the change you want to see in the world.”. So let’s do it payroll professionals! Let’s be, and lead the change!

Reading the Linkedin and other feedback from the “magic payroll button” article left me saddened more often than not. There are people who have committed to getting the job done through hell and high water for as much as 40 years and still feel that no-one truly understands the effort or personal commitment it takes to get the job done. We endure late nights, miss out on our family and postpone life. Many of us are refused leave at Christmas time and work public holidays year in and year out.

At the other end of the spectrum, there seems to be an abundance of those same payrollers with an absolute sense of humour and the ability to brush off the negative, step up and say “OK! What’s next?”

So here it is! Here’s the “What Next”. Over the coming 12 weeks, starting on Monday, I’m delivering a payroll innovation per week for you to implement. To some of us, these are hardly innovative, but every time I’ve stepped into an organisation, many of these are usually the first steps I take to quickly turnaround the perception of the service. They are easy wins. Take 12 weeks or 12 months to implement these ideas, it’s your call, but you will begin to live in a new world when you start to move down this path.

The 12 payroll innovations were selected to not only highlight your expertise to all “customers” of the payroll service, but also as they are key areas for time and cost efficiency gains and they will see you on your way to delivering service excellence. Any decent benchmarking program will focus on these areas as measurables. Here’s the list of the 12 innovations that are coming (and not necessarily in the same order):

1- Creating a knowledge base (for employees, managers, administrators and your payroll team)
2- Give your employees a “pay rise” by implementing programs with tax advantages
3- Becoming a vital information resource for Business Units and Finance
4- Creating a seamless New Employee Process for the whole organisation
5- Identifying and eliminating pain points for your team and customers
6- Creating valuable services and staff benefits via your third party creditors
7- Implementing error rates analysis to reap the rewards of superior service and cost and time efficiencies
8- Automation 101 – The Essentials of Automating Payroll Processes
9- Utilising Your HRIS or Payroll System for all its worth
10- Extracting the absolute maximum out of a limited training budget
11- Creating functional masterpieces with excel
12- Restructuring your payroll processes to create efficiency gains and service specialisations

While you await the first article, I will intoduce you to author Ron Kaufman and his book “Up Your Service!”. It’s an absolutely brilliant game changer! I came across this book years ago and now it’s a well worn management tool. Do yourself a favour and sign up for the Up Your Service! Insights newsletter at http://www.RonKaufman.com At the very least.

Ron explains the term “perception points” and how to radically shift other peoples’ perception of us by spending some quality time analysing our perception points. He does this in the easiest to read, bite sized and palpable chunks. If you are not converted by page 5, I’ll be surprised. In a rather large nutshell, the book tells us, if we didn’t realise already, that we have to accept some of the responsibility for how we are perceived. Absolutely every tiny detail we present to the world matters!

Step one in changing others perception of ourselves, is to look within and to examine what we are projecting. With the Up Your Service! book in hand, you will be keen to scrutinise yourself carefully, your team and your physical surroundings. You will understand the absolute importance of ensuring total professionalism in the end product of your services and begin to look at everything from the perspective of your customers service experiences and their five senses.

The whole concept of Ron Kaufmans “perception points” is that every time someone experiences a sight, smell, taste, sound or a feeling they are perceiving and your job is to ensure the perception you aspire to.

To begin the process, stop being the payroll manager for a moment, put your customer hat on and start observing your service. Stand at the entry door to your pay office and be your customer. What do you see? What do you hear? What do you feel? Is your office or workspace organised? Are your people welcoming? What do people get to physically see and touch from you? Does it make you proud? Cringe? Or just acknlowledge that it could be a little better?

Are your emails professional? Do you have forms that look like they’ve been photocopied a trillion times over the last 20 years? Are there archive boxes, filing and enough piles of paper around your office to give your Safety Representative a heart attack? Does everything you present say we are professionals and we are proud of our work?

Listen to the phone calls and empathise with the person on the other end of the phone. Attempt to understand if there is a deeper layer of concern to the questions being asked or objections being put forward. Are you and your team providing superior service or are you simply telling customers to buzz off in the nicest possible way? How do you show them that you actually exist to serve them?

To stand up and be noticed, we need to be someone of worth, or do something of worth. It’s time to change the course of history and start putting payroll on the corporate agenda… but it’s up to us to work on changing our world from the inside before we can start expecting the slightest change of mindset by a majority of those on the outside.

Join us on the journey by following this blog (top left of this page) or joining The Professional Payroll Manager group on Linkedin and each Monday your next step will be in your Inbox. I would love to have actual conversations along the way about your successes, your issues and any ideas and questions you want to share.

I am also trying to purchase bulk copies of Ron Kaufmans books, so if you would like to purchase through me via paypal, message me at any of my social media contacts and I’ll keep you posted when I’ve received a definitive reply.

(C) 2012, Louise Vidler

Follow on Twitter @louisevidler
Join the discussion via Linkedin group: The Professional Payroll Manager

Are you playing nicely on LinkedIn? Recruiters are watching…

 There’s increasing data on the fact that social media is playing a greater role in recruitment. I received just today, via twitter @shawnlyndon a link to the “2011 US Source of Hire Data” * Everywhere you look HR people and firms are talking about the upsurge.  Given that LinkedIn is a major player in the professional social media world, and again, an ever increasing beast, it is continuing to prove itself as the place to be, to get a look in for prospective jobs and clients.

This got me wondering whether recruiters just look at your profile or whether they do a little more digging around in your updates.  If they’re checking your facebook, surely they’d be looking at your activity elsewhere?

There are endless articles on how to present yourself and how to use social media to your advantage. What I haven’t seen discussed though (and serious discussion needs to be had) is the behaviour of people in discussion boards and forums and the content they place on them.

Typographical and/or spelling errors are rampant, even taking into consideration that English would be a second language for many.

My personal favourites are people that respond to job ads expecting the advertiser to chase them. They say something along the lines of “Yep I want a job, so here’s my lazy link with a sloppily written, poor attempt at an intro. Now come and get me!”  Do they then sit in front of their computer screens waiting for the recruiters to hunt them down? Since when?! If you show that much laziness and lack of initiative at the outset, why would they bother?

Then there are those that get involved in discussions (which is a great thing), but their language and use of it portrays them as elitists or simply ignorant.  I’ve seen some content that perhaps with another 60 seconds of thought process, may have helped the writer to reconsider before pressing the submit button.

They’ve pounded into the discussion with their worldly opinion and a complete disregard for whomever else may be reading their thoughts. Some are out rightly rude and others teeter on the line of disparagement.  Do we need to remind people about common decency?  I would call it stupidity, but in a world of political correctness…No, it’s still stupidity!

If people are as professional as their profile leads us to believe, then why do they allow themselves to appear on discussion boards as if they would struggle to write a letter, compose an email, construct a whole sentence, or even string a few words together?

When you write comments on discussion boards, please sit back for at least 60 seconds and take another look!  Check the spelling. Read your viewpoint from the receivers’ mindsets and consider how your comments may be interpreted. Does your contribution represent yourself, your industry and your employer or business well?  Ask yourself if a potential employer or client saw this conversation, would it secure you the job or put you out the door.

You can sell yourself all you like in a carefully constructed profile, but when you jump in feet first into the discussion boards what are you telling others about your professionalism, your ethics, your personality and quite frankly your basic ability to interact with another human?  Very revealing!

© 2012, Louise Vidler

Follow on twitter @louisevidler

Join the LinkedIn group The Professional Payroll Manager

Like the facebook page Australian Payroll Professionals

* 2012 Sources of Hire: Channels of Influence by Gerry Crispin and Mark Mehler

How The Magic Payroll Button Really Works

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.

Why HR and Finance Must Both Hold Payrolls’ Hand

One ongoing political battle in many organisations is who the Payroll Service should report to. Finance wins over mostly because of the sheer expense that is payroll. Then there are those organisations that see the payment of their most valued assets as an integral function of the Human Resources team, so the Payroll Service sits under HRs’ wing. Politicking aside, if organisational leaders actually sat down and measured the pros and cons on either side, it would be evident that the Payroll Service must have a solid working relationship and open communication lines with both the HR and Finance teams.

An important consideration in the #HR-v-#Finance pull of the #Payroll Service is to attempt to understand the mentality of both players, in the most general sense. Pull out your organisations’ HR and Finance mission statements and try to find commonality between them… I dare you!

Human Resources people are typically “people people” whose purpose in life is to implement strategies and programs to recruit and retain proficient, nurtured, engaged and empowered employees and to keep them safe and well in the process. In HR, grey lines exist at every turn: special circumstances and impacts of decisions with on flow effects to other employment relation issues and/or future strategies. HR people regularly have to consider the bigger picture, often for what are seemingly the minutest of details to outsiders.

Finance people are typically “numbers people” who usually perform comfortably within the predetermined and unwavering confines of accountings’ legislated rules, local and international standards, authority levels and organisational policies. They are comfortable with black and white. Being very generalistic, the purpose of Finance is to compliantly account for and report on all financial transactions within the designated timeframes.

Picture putting your HR and Finance people in a room and performing a group personality test. The room would separate into three distinct groups. In one corner are the “creatives” and “counselors”, most of which happen to work in HR, and in the other corner are the majority of the Finance team who are the “methodicals”. Polar opposites in the personality spectrums.

Left standing in the middle of the room are the in-betweeners: a mix of bewildered people who may be wondering if they have chosen the right career path, and conversely, those people whose personality types allow them to move comfortably amongst the HR and Finance personalities. (Just a note… seriously consider the latter for Payroll Management positions.)

Back in the organisation, sitting in the middle of the HR and Finance personalities is your Payroll Team, a complex mix of all the personality types. Every sizeable payroll team seems to have at least one member who cannot function outside the documented rules, without exception and at least one who spends all their time bending over backwards to ensure the staff are kept happy, possibly at the expense of some of the rules.

One of the hardest tasks for Payroll Managers is to have their team provide outstanding service within the confines of such a regulated employment, taxation and accounting environment and in the timeframes established in the majority of industrial agreements. The primary objective of a payroll service is to consistently deliver fully compliant, on time, best practice, and cost and time efficient payroll processes at a minimal cost per employee, with a zero error rate and zero impact on employee relations. To achieve this in unison with the grey areas of HR, and the black white of Finance, is a constant struggle.

While it is important to understand the differences in personality and objective between Finance and HR, Payroll does not get to sit in the middle as an innocent pawn. Payroll Managers need to understand (and teach their team to understand) HR strategy and to know the impact of their service to employee relations, with the same veracity a Payroll manager will have their team understand the legislative, accounting and compliance issues.

While ever the conflicting requirements between HR and Finance continue on either side of the payroll function, this will not be achieved with any consistency. Your HR, Finance and Payroll Management need to come together and devise a workable strategy that keeps everybody working towards their common and individual goals. HR has to come to the party on the black and white deadlines and compliance, while Finance needs to work into to their authorisations and policies some of the grey HR requirements.

Only by understanding the personalities and the objectives of each of the business units and combining these into a workable solution for the benefit of the whole business, can the payroll team then begin to provide a consistently outstanding, service excellence focused and fully compliant payroll service. The absolute one certainty in all of this is that it doesn’t matter who the Payroll Team report to in the organisational chart. It matters that there is a solid working relationship between the HR, Finance and Payroll Teams so the best of both worlds can be achieved.

Food for thought for your organisation? I welcome your feedback!

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.

You Absolutely Must Measure Payroll Error Rates!

“More people would learn from their mistakes if they weren’t so busy denying them.”  J Harold

A critical function of the Professional Payroll Manager is to minimise, if not eliminate, error rates. Payroll errors occur for a myriad of reasons and if you spend your days fire fighting, rather than investigating, you will probably see a compounding increase in the ongoing error rates.

• High error rates are detrimental to a service excellence focussed payroll team for so many reasons:
• It is a reputation destroyer
• Highlights compliance issues and attracts the attention of auditors
• Interferes with industrial/employment relations
• Inhibits efficiencies and blows out costs of payroll production

By implementing an effective measurement system, you can identify the volume of errors and the resultant root causes of each one, in order to execute solid corrective measures to eliminate reoccurrences. The root causes are easily identified and usually fall into one of the following categories:

• Payroll staff require retraining or instruction in a particular area
• Employees, Line Managers or HR staff require learning or instruction
• Effective processes and checklists are not in place
• Incorrect parameters (or a bug) in the payroll system
• Input information is not supplied correctly
• Fraudulent activities may be occurring

When building your error measurement system you need to record and analyse the following data as a minimum:

• The affected employees and the rate of incidence
• Dates of occurrence, identification and resolution
• Who was involved in the end to end process
• Who identified the error and how
• Why it was not identified in the payroll process
• The reason for the error
• The re-occurrence risk
• The corrective action required to eliminate further similar errors

Remind yourself and your team that error reporting is not about counting and allocating mistakes, but is about implementing systems and checkpoints to minimise errors and to improve capabilities, service and efficiencies.

An effective error measurement system makes good business sense, shows your commitment to service excellence and continuous improvement and goes a long way to ensuring compliance and efficiency.

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.

What does Payroll Management really mean?

Whether you manage a payroll of 20 or 20,000 people, the fundamentals remain the same.  Large or small, the payroll function must always include the same integral functions.  There are also certain personal qualities, attributes, skills, experience requirements and abilities that are required of Payroll Managers.

The typical position requirements of a Payroll Manager are to:

• Continually adapt the payroll function to remain legislatively compliant
• Lead, motivate and manage the payroll team
• Develop and implement effective policies, procedures and business systems
• Lay solid audit trails
• Identify and manage risks associated with payroll production
• Identify, report and assist in managing employee relations issues that arise
• Interpret awards and legislation and inform management of changes
• Understand basic accounting and general ledger concepts and complete monthly general ledger reconciliations
• To assist with or manage salary packaging
• Liaise with internal and external customers
• Complete all company and statutory reporting including PAYG, Payroll Tax, FBT, etc
• Manage the organisations’ superannuation funds
• Manage Workers Compensation Claims and associated policy renewals
• Support the senior management team

The typical personal skills and attributes required of a Payroll Manager are:

• Professional in conduct and presentation
• Exceptional communication (written and verbal)
• High attention to detail
• Progressive and dynamic
• Pro-active problem solver
• Change manager
• Proven supervisory experience
• Hands on management
• High exposure to and ability to manipulate relevant payroll system
• Advanced computer skills, usually requiring Excel or Lotus advanced abilities
• Autonomy and initiative
• Tenacity
• Analytical

To successfully manage a payroll function means to achieve and exceed all of the positions requirements of the position utilising all of the skills and attributes listed above (and those of your particular position description).

A good payroll function lays good audit trails, through the use of finely tuned business systems that incorporate processing check points, explicit procedures manuals and organisational policies, which are legislatively compliant.  You will be consistently evaluating and pro-actively moving your payroll function forward towards ‘the ultimate payroll service’.

A professional Payroll Manager consistently identifies risks, reports those risks to management and addresses them within the scope of their role.  Risks in payroll management are ever-present, far-reaching and potentially damaging to cash flow, the share price & public perception, yet can be easily managed.

Properly managed and systemised, each payroll process can result in zero (or close to it) errors and be systemised to ensure it is produced in the most time and cost efficient manner possible.

Senior management will view a professional payroll function with the respect it deserves.  They will seek information from you and value what you provide.  You, as a professional, will have taken the time to understand what management require and how they intend to utilise the information.

The employees of your organisation will feel that they are respected.  They know you will be doing your best to respond to their queries.  They will hear the smile on your voice when they are talking to you and your team.  No matter how inane the enquiry may be, you and your team will treat them with the utmost respect.  Your external customers will be treated with the same respect, urgency and professionalism that you bestow upon your internal customers.

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.