5 Crucial Tips to Positively Impact Payroll
Joe Tartell
We help business owners manage their payroll and workforce needs so they can focus on growing their business.
No need to reinvent the wheel with payroll, however there are some crucial tips that can impact everyone.
5 CRUCIAL TIPS TO POSITIVELY IMPACT PAYROLL
Over the years InVerify has managed payroll implementations, processed our own payroll and worked closely with payroll systems to extract data for our Employment and Income verification services.
During this time we have put together some things we have learned or have seen our successful customers do over the years to make a positive impact on payroll. This matters because payroll is a huge cost center, and controlling costs here is a direct savings to the bottom-line. Plus, streamlining these processes benefits every employee in the organization.
#1 – Paperless Payroll
Avoid printing checks and direct deposit advance notices. Not only is the cost of the infrastructure to support the physical printing significant, but also the labor and time spent on processing and distribution quickly adds up. More companies are requiring their employees to use direct deposit and in these cases everyone wins. Paper paychecks can be easily lost or stolen. Sometimes paychecks even end up at the wrong location on payday. And, occasionally, employees simply fail to pick them up. Even a paycheck for a very small amount requires employers to fulfill an escheatment procedure, which is a cumbersome process that transfers unclaimed paycheck funds to the state. According to the FDIC only 8.2% of U.S. households are “unbanked”, or with no bank account. If your employee population is part of this 8% consider pay cards or convenience checks, which are issued by the employee not the employer. To learn more about these options register with us.
#2 – Import Data Automatically
Manual data entry is a waste of time and resources, impedes efficiencies and increases the risk of costly errors. Use automated imports in areas like time clocks, earnings, deductions and more.
#3 – Improve Payroll Reporting
The payroll and HRIS system is the hub-of-all-things to an organization. Labor costs are usually the biggest spend. This large spend demands visibility to make important decisions. Spend the time to learn about the report building capabilities of your reporting tool or query capabilities directly from your payroll system. Employee records and pay information is frequently extracted and sent to other systems including Benefits Providers, Performance Management Systems, and Total Compensation Tools, so learn what is possible before the demands pile up. If you can’t write the report you need, don’t give up; take the time to get training or assistance from your vendor.
#4 – Audit your Payroll Results
Payroll error causes businesses to overpay their employees by an average of 1.2% each year. This totals millions of dollars of overpayments. (Source: Nucleus Research.) At a minimum, establish a process to proactively verify the results of payroll. Remember once the payroll is posted there is much more work later to make a change. Also be sure to check any system changes or updates before moving them into production and confirm they will not negatively impact payroll results.
#5 – Detect and Stop Check Fraud with Positive Pay
Most payroll solutions today will allow you to generate a positive pay file list, which identifies all issued checks. This list is sent to the bank so when the bank receives a check that is presented for payment, the bank uses the positive pay file to confirm it is legitimate. Be sure to have the bank contact you if any discrepancies exist.
Our experience has exposed us to these important tips. If you are not already doing these items you might want to consider making some improvements.
Our editors restricted us to 5 tips but we do have one final tip we would like to mention.
This final tip was very close to making the Top 5 list and we have seen many companies pursue initiatives to Combine Payroll Frequencies or Pay Periods. Take the time to understand why your organization pays different groups of employees on different frequencies. Consider combining pay cycles for greater efficiency. Our customers who have done this are enjoying the benefits of reduced number of processing periods, eliminating the need for monthly GL accrual, reducing tax deposits and interfaces, and have had more down time in between cycles to work on other items.
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