10 Steps that ensure a smooth running payroll department

Author: Ian Hurst — Managing Director, Paymaster People Solutions

There is nothing worse than that sinking feeling when you’re told that there’s a $%&*#@ with your payroll.

You cannot understand it — you’ve checked the payroll before it was released! You were sure that the payroll was correct! You’ve tirelessly been doing your best to keep tabs on all the ‘payroll issues’ that have successfully been attended to by you during the past few months, yet you don’t seem to be making any positive gains.

Allow me to offer some tips on how to make sure that you meet your goal of maintaining a smooth running, accurate, always-on-time payroll.

1. Reach ‘signed-off’ agreement on responsibilities

Schedule meetings with all your customers and information-suppliers. The goal is to make sure that everyone understands what is required of them. For example: what is the deadline for signing-off overtime sheets? Moreover, who signs it off and whose responsibility is it for making sure that the data is correct? Acknowledge that the payroll department will accept full responsibility for the subsequent, accurate processing of employee earnings and deductions calculations. Be sure this agreement is documented — i.e. put it down in writing!

2. Superior levels of training for all staff

Make sure that you (and everybody else) is properly trained and/or up-to-date with payroll legislation by means of ongoing training programmes. Be sure to plan for all employees to attend training programmes. Your goal is to equip well-trained payroll administrators to work independently and responsibly. Do not be deterred by negative client sentiment: your customers are sure to understand that there’s an expected ‘down time’ period when employees have to attend training programmes.

3. Reach agreement on data formats

Be ready to accurately state which format you’d prefer to receive your payroll data in? For example: in a Microsoft Excel spreadsheet format, or simply on email (as text)? The principle of this stipulation is simple really, so decide on your chosen format, agree to it, and enforce it! Avoid making compromises on how you receive your data . These usually end up wasting time, which is a certain way to make mistakes.

4. Reach agreement on payroll cut-off dates

This may seem absurdly obvious, but “Just Do It” as the Nike brand suggests. This applies to payroll departments too. Don’t delay! Draw up that annual schedule of critical payroll cut-off dates. A further tip: it may be worthwhile adding a few interesting unrelated—less important—dates like your birthday (with a “gifts welcome” reminder). Similarly, why not add SARS Tax-season dates which clearly indicate when certain tax submissions fall due.

5. Establish client-feedback opportunities 

Establish a process that enables easy communication with your customers. Use surveys, casual conversations and/or formal meetings. These all contribute towards ensuring that everybody remains on ‘the same page’ so to speak. Handy tip: sometimes a casual cup of coffee or a light breakfast is all it takes to get everyone up-to-date.

6. Reach agreement on procedural processes and check-points

Ensure that you have reached agreement on critical check-points (that are measureable). For example, last month’s gross salary minus leavers salary,  plus new employees salary, equals this month’s gross salary, or overtime hours signed off equals overtime hours paid.  Moreover, it’s always a good idea to keep tabs on employee movements: total number of employees minus resignations/dismissals plus new employees equals new head count. Sign off the payroll, and run the reports.

7. Identified areas of automation and implement 

Today’s HR-software applications are great for automation of many manual processes. For example, you should never be capturing data. Ideally, all data should be imported. Another example: leave applications and the collection of employee-payslips should be the responsibility of your employees. Similarly, computer-generated reports (to line-management) should ideally be automated. Alternatively, line-managers must be granted access the the HR-software system, such that they are easily able to extract their own reports. In short: continually explore new ways of delivering a service, without adding to your workload. Handy tip: integrating your payroll and accounting software would be a great place to start!

8. Make friends with your information-suppliers

Be sure that you strive to keep your clients happy all the time. Have a coffee and a chat with them regularly. More often than not, people are most willing to help you when you’ve earned their respect. If they sense that a good working-relationship has been established, you’ve earned their loyalty for life. Handy tip: finding quick solutions to small problems and awkward issues is a great way to build solid, lasting relationships with your employees.

9. Be ready, be alert — remain up to date with payroll issues

Never think that you have this perfected. Just when you think it is all done and running smoothly, something will crop-up. Be ready. Be alert. Remain on your toes! With a proactive approach, you can always be on the lookout for those things that will go wrong. Be sure to keep up with (and remain current) on issues in the world around you. Handy tip: consider joining special-interest LinkedIn Groups — this is a great space to start your online search for new trends in your field of interest.

10. Always be friendly and polite 

Conflict has never resolved anything! A calm and polite approach is certain to remedy the problem (while keeping everybody happy and smiling in the process).

To close, if you remain on the route of this tried-and-tested road-map, you are certain to see your new, well-organised, fully functional payroll department on the horizon soon.

Need more help? Talk to Paymaster People Solutions and discover how our professional people solutions could benefit your organisation today.

Paymaster People Solutions (Pty) Ltd is a subsidiary of Grant Thornton Advisory Services Cape (Pty) Ltd
Grant Thornton Advisory Services Cape (Pty) Ltd is a member firm of Grant Thornton International Ltd

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