Are you prepared to let your payroll burn down (Part One)?

Over the last year, I have spoken with many CFOs and CPOs about their Payroll. Just under 75% of them would say they are aware that they may have issues, but these don’t need to be resolved right now. The other quarter proactively seeks out ways to identify and mitigate any potential problems before it becomes a significant issue. I feel like some C-suite folks don’t want to open Pandora’s Box!

As humans, we seem to put in much energy when there is a crisis or when a process is completely broken but don’t tend to invest time and money unless there is an actual crisis. When there is a crisis, we are inclined to spend huge amounts of time and money trying to fix the problem to get back to a steady state. Much like we do with firefighters putting out the fire when this could have been all averted if we invested in fire prevention devices such as smoke detectors and had a process to prevent the fire in the first place. Fire prevention is much more cost-effective and has far less impact on the organisation.

Here are two tips to help keep your payroll running like a well-oiled machine, and not one that’s about to catch on fire!

Tip #1: Focus on your processes

The first step to avoiding a payroll disaster is to focus on your processes. Review your current processes and look for ways to streamline them. Eliminate unnecessary steps and simplify complex ones (we see this with Spreadsheets and reporting outside of systems).

If possible, automate repetitive tasks using software, AI/Machine Learning or outsourcing. By streamlining your processes, you'll not only make your payroll run more smoothly, but you'll also free up time for your team to focus on more strategic tasks.

Pro-Tips:

• When was the last time your processes were reviewed and updated??If this is over 4 weeks, then you fail to evolve and improve your processes.
• Don’t fear technology. Things like software bots and machine learning can save you a lot of time with repetitive manual tasks and allow you to focus on checking, reporting and analysing your payroll.

Tip #2: Review your awards and enterprise agreements

Another way to avoid a payroll crisis is to regularly review your awards and enterprise agreements for compliance. Make sure you’re up to date on the latest changes and that there are no gaps in coverage.

If you find any non-compliant areas, take steps to correct them as soon as possible. By remaining compliant, you'll not only avoid potential penalties but also ensure that your employees are being paid correctly.

Pro-Tips:

• Do regular BOOT tests to see if your Enterprise Agreements and Individual agreements are above award/s and check if all your pay scenarios are above the linked awards. Remember consistency is key, have this locked in as a regular cadence. We do this for Annualised Salary (hopefully), so why not your Enterprise Agreements?
• Map your Enterprise Agreements and Awards so you can get your teams to understand and decide on how these instruments operate within your organisation. (Message me if you want to find out more, we have a tool that can help you with this?)

?A common response I get is that we are OK we have regular audits and SOX compliant, which is fine if you want to pass a financial audit, but this doesn't look at your processes, and how you interpret your industrial instruments. So my message to CFOs and CPOs is you do need to dig deeper. This may involve opening up Pandora's Box!

Part 2 to follow next week.