By Nicola Smith, Pay Magazine

While the evolution of payroll software has been largely fuelled by legislative changes and the progression of the IT industry (namely Windows capabilities and intranet services), software developers are constantly enhancing their applications in order to remain competitive and meet the demands of the modern payroll professional. In recent years, these enhancements have manifested themselves as ‘time-saving features’, which solution vendors say are designed to unchain payroll teams from mundane administrative routines. But what is this new technology, how does functionality save payrollers’ time, and what are we doing with the saved time?

Devolution

Notably, web-based technology has facilitated the introduction of many time-saving features. Instantly recognisable are electronic filing, self-service capabilities and web-based solutions. While electronic filing has been legislation-driven and is said to improve accuracy, self-service and web-based functionality are independent developments that have opened up a wealth of options designed to reduce the workload.

The concept of self-service encourages employees and mangers to view and amend their own data. Many solutions also allow individuals to record their own timesheet and expense information. Richard Dutton, National Accounts District Manager at ADP, explains: “Empowering employees and managers in this way means various stages of paper shuffling can be eradicated, duplication avoided and the laborious task of checking by the payroll team is removed.”

While devolving data input and maintenance to individuals and managers is said to reduce administrative workload, the ability for employees to view their own data and submit electronic requests is designed to decrease the time spent by payroll dealing with day-to-day queries. Further advances enable managers to access ad-hoc reporting tools and allow employees to view their payslips on-line before the payroll is closed off.

Peter Cullum, Intellect’s Managing Director, comments: “Allowing employees to check their payslips on-line before the payroll closes means the hideous task of checking for errors is also deployed to the individuals. This means queries and amendments are dealt with before the payroll run, reducing time spent on adjustments in subsequent pay periods resulting in a more accurate payroll.”

Setting intranet/internet capabilities aside, there is a plethora of time-saving features available within modern software and service solutions. Most familiar is the ability to integrate HT and payroll databases, which aims to eliminate duplicate data entry and provide a single source common employee information. Ian Williams, Product Manager at CedarOpenAccounts, says that about 50% of data required to pay someone originates from the HR function.

“Improved systems integration capabilities and tools such as workflow have allowed the appropriate controls to be put in place so that data originating in the HR function can be automatically passed to update payroll,” he adds.

The introduction of workflow in the payroll arena is, unlike the integration of HR and payroll, relatively new. Workflow can equally be utilised to prompt user action following data changes and date driven events. It can automate the authorisation process of both permanent and variable data changes.

On closer inspection, it is not just new technology concepts that are dedicated to time-saving. Solution providers also offer a range of features that alleviate the mandatory tasks. Import and export of data between payroll and spreadsheets is an inherent part of many applicants. So too is embedded bank sort code validation and quick address tools, redundancy calculators, automatic P45 validation, retro-calculations, automated pay-awards and real-time processing.

Is Time Money?

There are varying views on the consequences of implementing time-saving functionality, however many agree it I dependent upon the size of organisation. In the smaller business market, the payroll professional often has many roles, such as accounts and HR. Reducing the time allocated to payroll means time can be spent managing the business as well as managing the development and performance of their employees.

While the perception exists the SME’s can now concentrate on other activities outside of the payroll remit, there are contrasting opinions over payroll resource utilisation in the medium to large business sector.

The typical effect of introducing new technology and time-saving activities is that payroll departments shrink. Those that are left become more of an audit/governance function, assessing and correcting mistakes of others and act as a help line to employees.

Bill Thompson of Northgate HR sees reducing payroll headcount as part of a wider centralisation of the pay function. “Ten years ago a large organisation may have had four or five payroll teams of three people running separate payrolls for different areas of the business,” he says. “Today the same company is likely to have one central team of seven or eight people. In short technology has driven efficiency into the payroll function.”

Furthermore merging HR, Payroll and Time and Attendance functions together and utilising an integrated database can enable companies o reduce the headcount in each previously separate area by 50%, while at the same time improving service.

In contrast, others see reduced administration responsibilities increasing the value payroll professionals bring to the business. Emma Jay of Selven Group comments: “More time can now be spent by payroll concentrating on core activities which assist in reaching strategic objectives, as well as increasing efficiency and accuracy.”

Having recently implemented hosted technology from Employer Services, Jason Lowe, payroll and pensions controller for Biffa Waste Services, Claims that technology has enables them to save on average 30% of their time. However, far from reducing their 11 strong payroll team, Jason says that introducing time-saving technology has enabled them to offer a more efficient service to employees and managers.

“We have been able to implement new business processes that help to save time in other departments and at the same time the payroll team are clearly more involves with the business and its objectives,” he says. “The payroll team are increasing their skills as roles evolve alongside new opportunities and strategies.”

Transformation

Time-saving technology has varying effects on the payroll function, it appears.

Mike Vernon believes that the differing results are the consequences of the initial business drivers. “If business constraint is the main driver then the reason for investing in new technology is to increase efficiencies and lower expenditure, resulting in headcount reduction,” he says.

“On the other hand, if the prime focus surrounds improved efficiency and new services, then the re-definition of roles is required to facilitate such.” In essence, today’s technology is neither intentionally decreasing manpower nor re-defining the payroll professionals’ role; the outcome is purely dependent on the initial business decision based on business drivers. What is widely acknowledged however is that technology is alleviating workload, increasing efficiency and more importantly is transforming payroll into a high-profile function for all the right reasons.