Payroll Best Practice

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Achieving Payroll Best Practices Through PeopleSoft Payroll Presented by: Praveen Gupta Manager January 17, 2007

Transcript of Payroll Best Practice

Page 1: Payroll Best Practice

Achieving Payroll Best Practices Through PeopleSoft Payroll

Presented by:

Praveen Gupta

Manager

January 17, 2007

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Agenda

Best Practices - Defined Best Practices - What and Why

– A synopsis of Payroll Best Practices and their benefits Achieving Payroll Best Practices through PeopleSoft Payroll

– The relation– Implementation Method– Case Study

Conclusion Q&A

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Aligns with strategy Reduces costs Improves productivity Promotes timely execution Enables better decision making Leverages existing and exploits emerging

technologies Ensures acceptable levels of control and

risk management Optimizes skills/capabilities of the

organization Promotes collaboration across the extended

enterprise

Hackett’s Best Practices are certified when there is a correlation with world-class performance metrics

Best Practices Defined:A Hackett-Certified Practice is a proven technique that delivers measurable value

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The payment and handling of salaries, wages, deductions and tax withholdings in accordance with organizational policies and government regulations. It includes the following sub-processes and activities:– Time reporting, including vacation, leave and absence management

– Employee data maintenance Employee inquiry response

– Pay calculation – gross to net, including salaries, wages, bonuses, commissions, allowances, deductions, third party vendor interface coordination, and tax withholding

– Pay distribution and deduction remittance, including direct deposit and check printing; positive pay administration; pay advise distribution; and garnishment administration

– Payroll tax and payment filing, including preparation and submission of payroll taxes and related Federal and state/province tax returns; and, year-end processing, printing, and distribution of employee tax forms

– Payroll accounting, including account reconciliation and general ledger interface

– Other regulatory and/or management reporting

PayrollProcess Definition

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Payroll Best Practices – What and Why

Payroll processing handled in a leveraged environment– Lower costs; higher efficiency; greater operational process transparency; consistency &

standardization; provides "Single City organization" view from customers across multiple departments

Key payroll personnel are APA CPP certified– Ensures that payroll resources are qualified have the competency requirements and skills

needed in a payroll environment. More competency translates to less turnover

Employee self-service utilized– Reduces transaction processing by admin staff; Reduced errors due to paper loss and keying

error; Employee ownership of data; speed in transaction processing; employee satisfaction

Direct deposit of employee paychecks utilized– Reduced processing and reconciliation of checks; More secure movement of funds; Reduced

administrative time invested in payroll cycle

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Payroll Best Practices – What and Why

Retroactive changes are automatically calculated within the payroll system– Reduces errors and manual calculations

Business expenses reimbursed through payroll– Eliminates duplicate check processing to same employee one on payroll side one on

accounts payable side – reduces cost. Customer satisfaction Service level agreements are established and monitored with business unit

customers and third party services providers– Ability to measure efficiency and effectiveness of service between business relationships

(customer, vendor, and payroll). Clear understanding of scope Garnishments module integrated and automated with payments and reporting

through electronic interface to agencies, where possible– Reduction in number of manual checks; Reduction in potential errors and omissions;

Improved employee relations with garnishment enforcement agencies; Reduced reconciliation; increased efficiency

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Payroll Best Practices – What and Why

EDI, ACH and/or other electronic means are utilized for payroll remittances to governments – Source of information available to vendors and government agencies on an as needed basis; Reduce

cost and staffing; Improve accuracy and quality All employee issues and resolutions are handled by one centralized point of contact

– Elimination of varied communications options

Multiple levels of role-based security to allow controlled inquiry and update access to data, reporting and system controls– Technical support cost savings; eliminates errors and rework; protects confidential information

Strong governance over core Payroll process definitions, table maintenance, security, limits of authorities, and escalations– Ability to measure efficiency and effectiveness. Clear understanding of scope.

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Achieving Payroll Best Practices Through PeopleSoft PayrollThe Relation

PeopleSoft architecture – supports best practices to a very high degree– flexible for implementations and rollout– Delivers “out-of-the-box” functionality for Payroll– Tightly integrated with other HR functions

PeopleSoft architecture specifically– Supports centralized ‘shared services’ center– Provides Self Service for Managers and Employees– Capable of high degree of automation – e.g. Workflow, Interfaces and EDI– Predefined regulatory reports– Multiple level of Security– Central point for all payroll related data, processes, and reports

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Achieving Payroll Best Practices Through PeopleSoft Payroll The Implementation

Targeting Architecture Construction Migration Evolution

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1 2 3 4 5 6 7 8 9 10

Architecture

Ongoing Project Management/Program Office

Ongoing Change Management & Communications

Requirements and Fit/Gap Analysis

Technology Architecture PlanningImplementation

Planning

Solution DesignVision

Validation

Business Case Development

Best Practice Vision

Quick Wins Development Quick Wins ImplementationProject

InitiationExecutive Interviews

Current State Review

Achieving Payroll Best Practices Through PeopleSoft Payroll The Implementation

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Integration Testing

Data Conversion

Production Cut- over Planning

Education, Training, & Coaching

Custom Development

Production Environment Deployment

ProductionCutover

Technical Knowledge TransferSystem

Optimization

Conference Room Pilot

Test Planning

Application Configuration

Production Cutover (Acceptance)

Detailed Org. Design

Policy & Procedure Development

Quick Wins Implementation

System Testing

Process DetailMilestones

Ongoing Project Management/Program Office

Ongoing Change Management & Communications

Functional Specs

Test Scripts

Performance/Stress Testing

Technical Specs

Executive Presentation

Function Testing

Acceptance Testing

Project Initiation

Non-Production Environment Depl.

Construction Migration

Achieving Payroll Best Practices Through PeopleSoft Payroll The Implementation

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The Industry– Printing and Publishing Industry– 27 business units in 11 States– Each business unit represents one publication– Every publication has its own HR and Payroll dept– A total of 9,000 employees

Background– Each publication had their own different technology and sets of pay rules– Each publication had their own different methods and ways of payment– Little or no automation– Opened a support center with common technology, PeopleSoft HRMS and Financials to

replace legacy systems at all newspapers

Achieving Payroll Best Practices Through PeopleSoft Payroll Case Study

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The Rollout– PeopleSoft Implementation was done as a de-centralized system– Support Center had the responsibility of maintaining setup and control tables– Additionally support center was responsible for mass data changes– Business Units were responsible for maintaining their own employees data– For Payroll, Support Center was responsible for

Running Time Admn and creating initial pay sheets Help and support BU to correct errors if any, or guide newspapers to the point of final calc Confirm Pay Run GL interface, ACH and Pos Pay files

– For Payroll BU was responsible for Ensuring accuracy of pay sheets and pay lines Run audits and correct errors Print and distribute checks and DDA

Achieving Payroll Best Practices Through PeopleSoft Payroll Case Study

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Acc

ount

s P

aya

ble

De

part

me

nts

NS

SH

um

an

Re

sour

ces

Ne

wsp

ape

r P

ayr

oll D

ept

B

Start

HR keys in all data changes prior to predetermined

data entry deadline *

Payroll keys in all payroll data changes (i.e. taxes and direct deposit enrollments)

prior to predetermined data entry deadline

Enter garnishments, one time deductions,

additional payments

AP to Payroll employee expense

reimbursement process

Mass data upload to paysheet (Such

as commission etc)

Payroll department reviews payroll error

messages generated by load

from Time and Attendance

Are there errors? ***

No

Yes

Delivered PS process (TL

Load) is run to load data from

Time and Attendance to

Payrolll

Pre-calc Audit report is run to verify integrity

of payroll, benefit and employee

information

Payroll enters/makes correction to Time

Entry Page

Run T&A Admin

Su

pp

ort

Ce

nte

r

Achieving Payroll Best Practices Through PeopleSoft Payroll Current Process

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NS

SH

um

an

Res

ou

rce

sN

ew

spa

pe

r P

ayr

oll D

ep

t

Preliminary Pay calc process is run to

calculate earnings and deductions

B

Payroll reviews and resolves issues

identified on Precalc Audit Report

Payroll reviews payroll error

messages generated by pay calc process

Are there any error messages?

Run Final Pay Calc Process

No

Are the messages HR/

Benefits related?Yes

HR/Benefits make appropriate

changes to the data

Yes

Payroll makes appropriate

changes to resolve the errors

No

Run Pay Confirmation

Process

Post Confirmation

ProcessRun Pre-confirm Audit report to

verify data

Run TL Load again, if necessary

*

Are there any error messages?

No

Yes

Su

pp

ort

Ce

nte

r

Achieving Payroll Best Practices Through PeopleSoft Payroll Current Process

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NS

SA

ccou

nts

Pay

able

Pay

roll

De

pt

Payroll Process

Run Direct Deposit Prenote Report,

Prenote Memo for employees.

Submit Manual check requests to AP for tax filing,

garnishments, wire funding for Benefits

etc.

Run other reports: Payroll register,

Deduction register, check register,

Payroll Summary etc.

Check Reconciliation

Process

Print and distribute checks and direct deposit advices

Outbound interface files are sent to

Aetna, Blue Cross/Blue Shield, Fidelity,

and Mercer.

Distribute hard copies of the reports within

newspapers as appropriate.

Run Payroll to GL Interface

AP receives the check requests and processes

payment.

Run Direct Deposit and Positive Pay Interfaces to the

Bank

Start

Su

pp

ort

Ce

nte

r

Achieving Payroll Best Practices Through PeopleSoft Payroll Current Process

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Multiple handoffs between business units and support center Dependencies upon email and / or phone confirmations – adds to overall processing time No defined process ownership Reactive management vs. proactive management Handoffs between Benefits and Payroll adds to complexity Lack of standard policies and procedures Entering time directly into pay sheets to address time reporting errors – resulting in an

additional manual process of verification Training on the philosophy and processes associated with payroll and payroll system AP and Cash Management receives multiple requests for remittances at different times

from different papers General lack of effective communication

Achieving Payroll Best Practices Through PeopleSoft Payroll Current Process – Pain Points

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Achieving Payroll Best Practices Through PeopleSoft Payroll

Best Practice Implementation Approach Taken

Payroll Process Transformation

ConsolidateData

Standards

Policy Changes

Self Service

Service Delivery

Consolidate / Centralize· Shared service center – centralize payroll processing to

administer all payroll functions · Non essential processes – like multiple requests,

interfaces and reports for external providers and regulatory agencies

Process Vision

Standardize· One consistent process to enable payroll to increase

accuracy, efficiency and effectiveness· Consistent, simplified policies and procedures to reduce

complexity· Standard pay cycles, earnings and deductions

Automate

· Employee and Manager self service· Workflow solutions

Eliminate· Transactions – like process to verify time accrual

between T&A and Payroll· Work steps to complete work – like wait for email /

phone confirmations, · Work steps that don’t add value to the process

Negotiate and explore to outsource

· Check / Direct Deposit printing & mailing· Tax reporting and remittances

The payroll strategic transformation is “the catalyst” for fundamental change which will result in effective and efficient full

payroll service delivery to newspapers

Best Practice AssessmentCurrent State Assessment

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Achieving Payroll Best Practices Through PeopleSoft Payroll

Best Practice Payroll ProcessA

cco

unts

Pay

ab

leD

epa

rtm

ent

s

Payroll Processing – Future Proposed Practice

Hum

an

Res

ou

rces

NS

S

Start

HR keys in all data changes prior to predetermined

data entry deadline *

Payroll keys in all payroll data changes (i.e. taxes and direct deposit enrollments)

prior to predetermined data entry deadline

AP to Payroll employee expense

reimbursement process

Payroll enters/makes correction to Time

Entry Page

P-1 P-2

Mail Checks Call Center

Employee Questions

?

Su

pp

ort C

en

te

r

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Achieving Payroll Best Practices Through PeopleSoft Payroll

Best Practice Payroll Process

Acc

ount

s P

ayab

le

Post Pay Confirmation Process - Future Proposed

NS

S

Payroll Process

Check Reconciliation

Process

Outbound interface files are sent to

Aetna, Blue Cross/Blue Shield, Fidelity,

and Mercer.

Run Payroll to GL Interface

Journal Generator

AP receives the funding requests and processes

payment.

Run Direct Deposit and Positive Pay Interfaces to the

Bank

StartPrint and mail

Checks & direct deposits

Run registers and reports

Su

pp

ort

Ce

nte

r

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Achieving Payroll Best Practices Through PeopleSoft Payroll

Benefits Realization

Annual Projected Savings

$2.1 Million

Projected Improvement in Efficiency and Effectiveness

71% drop in number of tickets

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Achieving Payroll Best Practices Through PeopleSoft Payroll

Benefits Realization- Other Key Numbers

$234

$96

0

50

100

150

200

250

Current Projected

3.84

1.52

0

1

2

3

4

Current Projected

$4.87

$2.00

0

1

2

3

4

5

Current Projected

-33%

-50%

-50%

-40%

-30%

-20%

-10%

0%

Projected (Low) Projected (High)

Payroll services cost per employee Payroll services personnel per 1000 employees

Estimated reduction in payroll tax fines, penalties & interest

Cost per pay check

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Conclusion

Technology is a great enabler but the right implementation makes the difference

With best practice approach, defined goals can be measured and achieved

A set of standard processes goes a long way towards organization efficiency

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Questions