Payroll Best Practice
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Transcript of Payroll Best Practice
Achieving Payroll Best Practices Through PeopleSoft Payroll
Presented by:
Praveen Gupta
Manager
January 17, 2007
2Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 2
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
3Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 3
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
4Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 4
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
5Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 5
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
6Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 6
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
7Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 7
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.
8Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 8
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
9Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 9
Achieving Payroll Best Practices Through PeopleSoft Payroll The Implementation
Targeting Architecture Construction Migration Evolution
10Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 10
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
11Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 11
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
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
12Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 12
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
13Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 13
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
14Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 14
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
15Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 15
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
16Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 16
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
17Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 17
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
18Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 18
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
19Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 19
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
20Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 20
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
21Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 21
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
22Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 22
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
23Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 23
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
24Answerthink Overview | June 30, 2003Achieving Payroll Best Practices Through PeopleSoft Payroll 24
Questions