7 top tips for streamlining your

payroll processes

Here’s what we’re going

to cover:

Timesheets

Payroll documents

Holiday absence

Statutory payments

Overtime & bonuses

Auto-enrolment

Reporting

Timesheets

If you’re in an environment where employees work different hours each pay period, perhaps at different rates, then timesheets will be a pain with which your payroll team is very familiar.

Just getting employees and managers to submit approved information in a timely fashion is troublesome enough, before the keying of that data into your payroll system is even considered.

Time consuming and inaccurate

@$%*x!

Timesheets If you’re using timesheet data to pay people then obviously it’s important that it’s accurate – for your employer and for the employee.

Measure If you start keeping tabs on this process then it is highly possible that you will be quite shocked by exactly how much time is spent each pay period collating timesheet data and reconciling it!

• Are you confident that the information submitted by employees is accurate in the first place?

• Every time data is manually entered into another system the risk of mistakes caused by human error increases

• It can be very difficult to pick data apart and identify where a problem occurred.

Now get help

Timesheets

Use a format that supports direct import into your payroll system.

If you are currently using paper documents or double-entering data then this will go a long way towards improving both accuracy and efficiency. You could use:

Tip no : Improve the way in which timesheet information is submitted to you

• A spreadsheet that has been specifically designed for the purpose

• Electronic timesheet software

• A time and attendance system

But which is best?

Timesheets Which method is best?

Spreadsheets Cheap and easy to implement. Require either the employee or supervisor to have a computer. You can never be sure that the data being entered is accurate.

Verdict

Timesheets Which method is best?

Electronic timesheet software Allow employees or managers to keep a tally of the hours being worked and even what has been worked on during that time. May have authorisation features built-in. May be accessible via smart phone apps. More expensive than spreadsheets. May record the time automatically but usually the employee has to record it themselves. May require customisation to get data into your payroll system.

Verdict

Timesheets Which method is best?

Time and attendance software Offer some great and innovative ways for capturing working times; biometrics, smart phone apps etc. Records employee working times automatically so is very accurate. Includes planning and authorisation features. Data can easily be imported into your payroll software (fully integrated solutions are also available). Expensive to implement but the ROI can be excellent.

Verdict Tip: Download our guide to Building a business case for software: some tips for calculating ROI

Payroll documents

Printing, sealing and distributing paper payslips and other payroll documents is an administrative burden and expense that your payroll team, and your business, could quite probably do without.

The financial costs of paper payslips go way beyond the paper that the pay information is printed on.

Time to say goodbye to your printer?

Payroll documents In calculating the true costs of producing paper payroll documents don’t forget P60s and P11Ds as well as payslips!

Now get help

Measure • The cost of purchasing sealing machines, printers and consumables.

• The energy required to run the printers.

• The time and energy associated with distributing payslips.

• The cost of stamps.

• Labour costs or bureau costs if you outsource payslip production.

Payroll documents

Many payroll software packages now include the facility to distribute secure payslips via email. It’s quick, easy and free!

If you have an employee self-service HR system then you can also make these documents available via a secure web-interface.

The beauty of this is that employees can view and print documents whenever they need to: meaning your payroll team will be relieved of the burden of being asked to provide copies.

This route may not be right for all employees of course, but if you restrict paper payslips to just those that have no PC access then you’ll still be making a considerable financial and time-saving.

Tip no : Move to e-payslips, P60s and P11ds

Tip: Download our guide free guide - Payroll: Reducing Paper Output With E-Payslips, P11ds & P60s.

Holiday absence

What is the process for the booking and authorisation of holidays in your business?

And how is this information submitted to the payroll department and subsequently entered into your payroll software?

In many businesses the holiday booking process is still manual, causing lots of people a whole lot of hassle.

Let’s take a look at a typical process…

A whole lot of paper shuffling…

Holiday absence Here’s what a typical paper-based holiday absence management system looks like:

Employee decides to book a holiday

Employee checks entitlement

Employee checks colleagues’ plans

Employee completes form

Employee passes form to manager

Manager double-

checks entitlement

Manager approves or declines holiday

Employee informed

of decision

?

Form passed to HR

and Payroll HR & Payroll manually

enter data into systems

Holiday absence Of course there are lots of other things that can happen instead…

Employee decides to book a holiday

Employee doesn’t check entitlement

Employee doesn’t check colleagues’ plans

Employee completes form

Employee passes form to manager

Manager loses form

Employee goes on holiday anyway

???

Department is left short-staffed

Negative impact on clients and employees

Holiday absence

What with all the questions and paper shuffling, each and every stage of this process puts an additional administrative burden on Human Resources and Payroll staff.

Factor in calculating holiday entitlements for non-salaried employees that work irregular hours and you’ve got yourself a full-on headache!

Paper-based absence management schemes are inefficient for everyone…but especially for the HR and Payroll teams.

Find out how to get

rid of this hassle

Holiday absence

The good news is that there is a much simpler way: that is to use a web-based manager and employee self-service portal than integrates with your payroll software.

• Relatively inexpensive to implement

• Save an inordinate amount of time across the business

• Are a great way of sharing tailored information securely

• Employees can easily see the holiday they have available to them and check to see when colleagues are on holiday

• Managers can then approve the request online

And then…

Tip no : Automate holiday absence management

The holiday is seamlessly written to the payroll database without any need for involvement from the HR or payroll team.

Statutory payments

Absences relating to sickness, maternity, paternity, adoption, and more, are a fact of life in any business.

Payment relating to them is also governed by law, so it’s especially important to get them right: non-compliance can be a costly affair.

Getting the information you need to pay your employees correctly every time.

Statutory payments Tip no : Simplify and automate accurate statutory payments Who should the responsibility lie with?

Keeping tabs on statutory absence, particularly sickness, and reporting it to HR or Payroll should be the responsibility of line managers.

The subsequent management of correct payments is then the responsibility of whoever is in charge of the payroll process.

Now get help

Ensure that processes for recording and managing statutory absences in your business support getting the necessary information to your payroll team or bureau and then to HMRC in a timely fashion each pay period.

Statutory payments

A self-service HR system integrated with your payroll software is the perfect tool for managers, or in some cases employees themselves, to record statutory absence information.

As self-service software is typically web-based it is accessible from anywhere, meaning information can be entered and shared with relevant parties immediately without the delays associated with more manual processes: these often cannot be completed until the manager is next physically in the office.

Give line managers the tools to ensure they get the process right.

Statutory payments Use process automation to ensure policies are followed through.

Time and Attendance software If you have a T&A system it will automatically register when an employee hasn’t turned-up, notify the supervisor and prompt them to take action– for example confirming whether that employee is off sick or just late. When the employee subsequently returns to work again the T&A system registers this fact and can automatically record an end-date for the absence. Where your time and attendance is integrated with your payroll software this information is shared seamlessly.

Workflows

Entering a particular type of absence via self-service can be set to trigger workflows to smoothly guide managers through your company processes, improving policy adherence. The absence data can then feed directly into payroll.

Statutory payments How to stop worrying about statutory compliance.

Of course, even if you know about statutory absences you will still need to be confident that you are always paying in line with the latest legislation.

If you use a respected payroll software package with HMRC recognition you can be sure that this is taken care of for you.

You will also need to ensure you have a great interface between the software you use to capture and record absence information and your payroll system. Or better still look for an integrated HR and Payroll solution.

Tip: Visit HMRC’s website for a list of HMRC recognised PAYE payroll software.

Overtime & bonuses

If every employee were paid the same amount every single pay period then payroll would be so much simpler wouldn’t it?

But alas, even once you’ve covered paying people for the hours they’ve worked and the hours that they didn’t because they were absent or on holiday, there are still other payments to be approved, recorded, made and reported to HMRC - such as overtime or bonus payments.

£100

Tip no : Simplify the way overtime and bonus information is managed and submitted

Overtime & bonuses Overtime is an area that can quickly impact on a business’s profitability if not tightly controlled.

It can also cause a sour atmosphere to develop amongst a group of employees if it is felt that it is not being fairly distributed.

Therefore your business’s overall aims should be to:

• minimise the need for the use of overtime through careful planning

• to have strict policies regarding its allocation when it is required and

• processes in place to ensure accurate and prompt payment through payroll.

Overtime & bonuses

Time and attendance software can help allocate the most appropriate employees based on skills and availability. (Where zero hours contracts or demand scheduling is used this can be invaluable.)

A T&A system could also:

• Show where a plan hasn’t been adhered to and why.

• Support the automation of authorisation procedures.

• Transfer authorised overtime payments directly into integrated payroll software.

Good planning equals less overtime to worry about…and that means using the right employees for the job.

HR metrics A department that uses a lot of overtime needs further investigation.

Is there a recruitment or training requirement that needs addressing?

Doing so could ultimately save your business ££££s.

Tip: Download our free whitepaper: Why do Companies implement Time and Attendance Systems?

Overtime & bonuses

Paper based systems for requesting and approving bonuses and other ad-hoc payments can be problematic to manage and to report on from an auditing perspective. Again technology provides the answers.

A good manager self-service system may include the facility for managers to request such payments for their employees, with additional authorisation stages built-in.

Authorising and paying bonuses.

Once authorised, payments can go straight through to an integrated payroll system.

This results in a seamless, paperless process that is not only fully auditable but incredibly efficient.

Auto-enrolment

Workplace pensions reform has so far only impacted the UK’s largest employers. However a great many more organisations will have their auto-enrolment staging dates during 2014.

The rules regarding employees’ eligibility are complex and each employee will have to be assessed against them at every pay period.

Indeed a whole industry of “middleware” and expensive consultancy services has sprung-up around managing this process!

Simplify keeping on top of your legislative duties.

Auto-enrolment

If you have decent payroll software it is doubtful you will require any additional auto-enrolment solutions.

Assessing eligibility is a function of the payroll calculation and most market-leading payroll software packages will include this functionality, either as standard or as an option.

Some will also enable you to automate communications with employees and submission of data in a format to suit your particular pension provider.

Tip no : Automate the auto-enrolment process

Tip: Beware of scare-mongering tactics and investigate the capabilities of your existing payroll solution very carefully before being tempted to shell out on expensive “middleware” or services.

Reporting

Imagine your FD suddenly requested a report you weren’t expecting to have to provide; how much absence is costing in the telesales department, or how much overtime has been paid over a specific period to employees working under a certain supervisor in manufacturing, for example.

How long would it take you to collate that information?

And once you’d done so, how confident could you be that it was accurate?

Can you get your hands on the data that you need?

Reporting

The only simple answer here is the use of technology.

The beauty of integrated Human Resources technology, that encompasses workforce management and payroll on a single platform, is that it provides a strong strategic tool for planning, recording what is actually happening, measuring your business’s effectiveness at meeting goals and identifying reasons that it isn’t.

Businesses using paper-based systems or a number of standalone systems can only dream of achieving this level of insight without an inordinate amount of manual effort.

Tip no : Get your reporting in order

Next steps We hope you’ve found this e-book useful

If you’d like to find out more about Carval’s integrated HR and Payroll technology then why not:

• Visit our website

• Request an information pack

• Join a webinar

• Book a demonstration

• Or call us for a chat on 01908 787700