As we venture into 2024, the landscape of payroll management is undergoing a significant transformation. This shift is fuelled by the need for more efficient, transparent, and compliant payroll systems. This article delves into the innovative solutions and best practices being adopted in the industry, highlighting their implications and benefits.
With the ever-increasing cost of staff through wages and taxes it is becoming more and more important that you can maintain efficiencies in back-office staff so that more of your team can be in front facing, chargeable roles.
On top of this, the cloud of compliance requirements means that payroll staff knowledge continues to require regular updating and the weight of red tape to meet legislation and audit is growing. The risk of non-compliance is simply too great and too easy to accidentally incur.
So how does a professional payroll company do it? We asked Dorretti De Graaff CEO and senior accountant at Brightpay for her thoughts.
“It comes down to 2 main things: Automation and processes.”
Dorretti tells us that investing in robust payroll software is pivotal with the systems adept at handling complex calculations and adapting to varying pay conditions, thus streamlining the payroll process. They also usually have a Self Service Portal for employees where they can access their timesheets and pay slips, make changes to their details and report expenses and discrepancies. This both decreases back-office work and empowers employees while also enhancing transparency.
“Excellent software is key to improving efficiency but at the same time, it is a crucial piece in ensuring compliance by removing human error.” Dorretti says. Software plays a large part in compliance management, but Dorretti is a big believer that there is always a human input requirement to every payroll. “A person will always be needed to do checks”. To make sure that the human element does not bring errors, Brightpay has a rigorous system of processes that are clearly documented from in pay run spot checks, through to end of pay run reports and regular audits of all areas of the payroll process. These processes have clear documentation built in to ensure that they are not only followed but they can be shown to have been followed at every step.
The other side of the human factor is regular training. The team are continually staying up to date with the latest labour laws as well as the policies for every company they work with.
Dorretti continues…
“With all that we do to stay on top, I don’t know how many small businesses manage it for themselves. Especially in Healthcare where the SCHADS award is so complicated.”
The final part of the human side for Brightpay is establishing feedback loops. With employees and managers, this is instrumental in continually refining the payroll process. In every pay run, the addition of multi-factor approval reviews is recommended, especially for complex scenarios arising from SCHADS, to ensure a breakdown in pay calculations or payroll auditing is managed effectively.
- If using a manual system, ensure the basic timesheet aggregation is spot on, and calculations are accurate
- If using a software system, ensure that the product is well understood and timesheet imports do not create artefacts and errors.
- Create a feedback loop between payroll and the scheduling/rostering team and challenge your teams to meet KPIs
- Identify and measure breaks and allowances, particularly meal breaks which must be planned and taken.
- Error checks and data validation are performed every working day – not just payday.
- Understand your overtime – measure and check expenditure – set a budget
- Ensure your leave system is robust and documented as a well known policy.
- Understand the entirety of payroll expenses. Check the proportion against your business income.
- Celebrate cross-checking and data accuracy as part of your work culture
- Enlist the aid of independent experts – they bring a learning opportunity and can assist in managing potential risk.
