Payroll Pitfalls: Exposing the True Time Thief in HR

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"I once watched an HR team spend more than 20 hours fixing pay discrepancies from just one pay period—the stress was palpable!"

Payroll is often seen as just another routine task—until it isn't. For many HR professionals, dealing with payroll errors is not just a nuisance; it's a recurring nightmare that eats up valuable time and resources.

What if I told you there's a way to drastically reduce these errors and reclaim those lost hours?

1. Implement a Payroll “Blackout” Period: This period is typically set to ensure that payroll processing is not interrupted by last-minute modifications, which could lead to errors or delays in payment processing. During the blackout period, HR and payroll departments finalize all data entries, such as hours worked, deductions, and any other payroll-related adjustments.
2. Follow an Effective Payroll Audit Process:? ?Companies who follow a documented audit process each pay cycle can minimize or even eliminate the need for off-cycle checks.? This not only saves time for the payroll team but also makes the finance team very happy.
3. Checks and Balances:? Employ a dual-control method where one HR professional completes the payroll audit and a second person verifies the results to maintain compliance with Sarbanes-Oxley requirements. This ensures accountability and accuracy, safeguarding against errors and fraud.

By implementing effective audit strategies and utilizing the right technology tools, payroll can be transformed from a time thief into a well-oiled machine.

Remember, every minute saved on payroll is a minute gained for strategic initiatives!

Check out my 4-step audit process below...

An Effective Four-Step Payroll Audit Process

An effective payroll audit involves a thorough review and verification of payroll records against other financial and operational data.

Here’s a breakdown of the essential components of an audit that can help safeguard your company from costly errors and regulatory penalties.

Step 1:? Payroll Reports

• Detailed Employee Reports: Review individual employee payroll records to check for consistency in pay rates, hours worked, and deductions.
• Cross-Checking with Timekeeping Systems: Verify that the hours paid match those recorded in timekeeping systems.

Step 2:? Audit by Pay Components

• Earnings and Deductions Review: Examine all pay components, such as earnings, paid time off, ?bonuses, and overtime, along with deductions, including garnishments, taxes, benefits, and other withholdings.
• Exception Reporting: Identifying and investigating pay components that deviate from expected norms or historical patterns.

Step 3:? Reconciliation to Previous Period(s)

• Period-over-Period Analysis: Comparing current payroll data with previous periods to detect discrepancies or unusual fluctuations.
• Year-to-Date Analysis: Ensuring cumulative payroll data aligns with benefit elections and employee records across the fiscal year.

Step 4:? Verification

• Compliance Checks: Ensuring payroll practices meet all relevant legal and regulatory requirements, including local and state tax laws.
• Second Review:? A second person should review and confirm the final audit results before payroll submission.

Curious to learn more about optimizing your payroll process? Click the link in my bio for valuable insights, or reach out to discuss how we can work together to enhance your HR operations!

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MS Excel Shortcut

Are you using Excel shortcuts to insert or delete rows? Here's how to do it…

To Insert Rows in Excel:

1. Select the Row: Click on the row number where you want to insert a new row. If you want to insert multiple rows, click on the first-row number, then drag to select additional rows.
2. Insert the Row: For Windows: Press Ctrl + (Plus key on the numeric keypad)

To Delete Rows in Excel:

1. Select the Row: Click on the row number of the row you want to delete. To select multiple rows, click on the first-row number, then drag to select more rows.
2. Delete the Row: For Windows: Press Ctrl - (Minus key on the numeric keypad)

This will make formatting faster and easier.

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