Payroll is one of HR’s most critical duties. Not only does it need to be accurate, but it must adhere to tax laws and protect confidential information.
Frequent payroll errors can cost the company money and damage employee morale. Fortunately, there are several ways that HR can make payroll more efficient. Let’s take a look at them.
Train your employees
While HR employees may be highly qualified in their field, not all have extensive knowledge of payroll management systems.
Organizing payroll training sessions for your team will help them understand how your procedures work, clarify your payroll policies, and improve collaboration within the department. It reduces the chances of misunderstandings between HR and the rest of your team, which can lead to errors in payroll processing.
Besides improving payroll processes, your HR department can save time and effort by providing employees access to the employee self service portal. It will make it simple for them to record changes to their personal information, working hours, sick leave, or maternity/paternity leave. It will also allow them to check the status of their paychecks, as well as track expenses.
A growing number of employees prefer to receive their pay on an on-demand basis. If you can find a way to support this trend and provide employees with options for how they want to be paid, you will increase employee satisfaction.
Your HR department must stay current on government regulations regarding employee pay and benefits. It ensures your business does not fall foul of compliance audits and complies with all applicable laws.
It is also important that your HR team knows what information other departments need for payroll to run smoothly, such as if you are awarding an employee a pay rise. Your HR team should then communicate this to your accounting and finance departments so they can reflect the change in employee paychecks accordingly.
Create a Payroll Schedule
Payroll processing can be a highly time-consuming process. It’s also a high-risk function, with errors and omissions that can lead to backed-up workflows and missed deadlines for key functions such as tax deductions, benefit enrollments, direct deposit, and other payments. These risks can be reduced, and timely and correct employee payments are guaranteed with the right payroll plan.
The best payroll schedule for your business will depend on several factors, including state regulations and cash flow. Additionally, you may need to balance employee expectations and the ability to manage payroll expenses against the cost of payroll management services. A monthly payroll schedule occurs once per month on a set recurring date. It is a good option for companies with salaried employees or with a low number of hourly employees.
However, it’s important to review regulations as they vary by state and region and to determine if there are any specific requirements for your area. A bi-weekly payroll schedule is conducted every other week, on the first and 15th or the 15th and 30th of each month. It is a popular payroll option for retail businesses and other industries that experience seasonal or busy periods.
It also helps reduce the amount of time administrators must spend running payroll. The predictability of a bi-weekly schedule also makes it easier for employees to organize automatic payments such as rent, utilities, health insurance, and subscriptions.
Establish Standard Operating Procedures
Clearly defined and mapped processes and operations help employees work effectively and eliminate confusion. HR can use various formats to document and communicate the payroll process, including checklists, presentations, handouts, and infographics. It’s important to get input from the team before implementing any changes, especially for newer initiatives.
Payroll processing is one of the most complex aspects of any business. It requires calculating salary, wages, and deductions while ensuring compliance with tax laws. The risk of errors can be decreased by placing checkpoints at crucial places in your payroll processing workflows. These checks should be done consistently to ensure accurate results. An arduous and cumbersome payroll process burdens your HR staff unnecessarily.
It also increases the likelihood of error and can harm employee relationships. For instance, if you classify a worker as an employee or contractor when they should be classified as independent contractors, it can lead to significant penalties from your government agency.
Integrating your systems will help you process payroll more effectively by removing the need for manual data entry and lowering the likelihood of mistakes. For example, if you manage your HR and payroll departments separately, you run the risk of data mismatch when making salary adjustments for an employee. You can set up a real-time system to reconcile data across the two departments to avoid these issues.
Automate It
Automating the process is one of the best ways to improve efficiency and reduce error rates in payroll. Several HR software solutions are available that use automation, smart data and connectivity to streamline the workflow for your organization.
These systems enable direct deposit, allow employees to access their pay through mobile apps, provide easy-to-read reports and help with tax filing. By automating manual processes, your HR team can focus on delivering value to the organization.
The first step in determining which functions to automate is to audit your current procedures. It can be done by looking at each workflow stage and identifying any bottlenecks causing inefficiencies or errors. You can then decide which processes to automate and start the implementation process.
Workflow automation reduces human errors to near zero in compensation planning, timesheet processing and expense management. It enables HR staff to devote more time to concentrating on high-value requests and fostering a pleasant workplace culture.
Tools can centralize PTO requests and approval, making managing leave for your growing team easier. It saves HR teams valuable time and energy to focus on building a strong company culture, increasing employee engagement and meeting the business’s goals.
