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How to Improve Payroll Processing

Posted on Tue, Nov 27, 2018 @ 07:00 AM

Many organizations are faced with a “do more with less” mandate, which extends to their staffing. Tight budgets are getting even tighter and staffing and resources are being impacted, which can affect the retention of administrative personnel.

The expectation is that employees can still produce the same quality (or better) and the same volume of work with fewer resources. Under these circumstances, payroll is being pushed toward streamlined processes, fewer manual processes, and less data entry — changes that are necessary to accomplish routine activities and crucial if payroll is to contribute to the company’s goals and objectives.

To evaluate payroll productivity for your organization you should look at how a new payroll solution can help reduce both hard costs (overtime) and soft costs (freeing staff for new projects and strategic initiatives). It is in this way that you can most help your company improve payroll processing and increase efficiency.

The first step is to calculate the time it takes from obtaining gross data — including wrangling timesheets — to closing out the payroll period and generating reports. Mercer has calculated average cycle times for payroll tasks. If you are taking longer to complete these steps, your organization is likely experiencing increased costs, inefficient processes, and lost opportunities to work on other payroll projects.

Payroll Process

Time to Complete

Weekly payroll cycle

1.9 days

Biweekly payroll cycle

4.6 days

Off-cycle payments

1.4 days

Automation will reduce the total processing time required, especially if the solution combines time and payroll in an integrated platform. More than 18 percent of payroll processing time is spent on data entry tasks, which also rank highest in error-prone activities at 35 percent. Reducing processing time delivers hard-cost savings through reduced overtime. Organizations can also achieve valuable soft-cost savings that allow personnel to focus less on administrative tasks and more on the strategic aspects of payroll. The time saved can be reallocated to other projects and company initiatives.

Payroll

 

    

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