Transcript CPP Review '08 - Chicago Chapter APA

Section 12 –
Payroll Systems &
Technology
Rachel Brooks, CPP
Implementation Consultant
Paylocity
[email protected]
7/17/2015
Objectives of a Computerized Payroll System
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Federal, State, Local withholding, depositing &
reporting requirements
Timely & Accurate paychecks, direct deposits
& other disbursements
Adequate records of all data & transactions
Internal Reports
Guarantee security of the system
Interfacing & Integration
 Integration: Payroll, HR, Benefits into one
shared database
 Interfaces: Those departments
transferring data from one system to the
other & to other company systems
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Interfacing – working with other
systems & Departments
Definition: the place where 2 systems meet! –
i.e., they can “talk” to each other, be
understood, and share data
 HR, Benefits, Direct Deposits
 Labor Costs, Bank Accounts, GL
 Time & Attendance, Accounts Payable, SSA
 Outside benefit administrators; SUI, Taxes,
Child Support
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Integration of Payroll & HR Systems
Definition: System that provides a shared
database for HR, PR & Benefits
 Reasons to integrate:
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Streamline HR, PR, Benefits functions
Consistency of data in 1 database
Improvements in system
Security!
Service Providers - Advantages
Definition: Fully outsourced – i.e., like freelance
accountants!
 Low fixed costs
 No extra room or extra employees
 New services can be added
 Reduction in processing delays
 Reasonable processing costs
 Fewer research problems
 Networking
 Training & Support
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Service Providers - Disadvantages
 Lack of control over security
 Filing & depositing errors
 Little flexibility for late changes
 Unique needs create problems
 Potential high variable costs
 No control over breakdowns
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Application Service Provider: ASP
Definition: provide your company with an
application to process your payrolls
 Installed on your servers
 Accessed by you on their servers
 Fee based on each employee’s payment
processing
 Usually no need to hire add’l staff to process
payroll
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Business Process Outsourcing: BPO
Definition: outsourcing of business processes &
functions, including support, including payroll
& benefits administration
 i.e.: the BPO takes over the entire business
process – PR, HR & Benefits and runs it!
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In-House Payroll Systems
Definition: Computerized payroll system located on
company premises
 Hardware: Computers, networks
 Real time or batch processing
 Advantages:
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Control; Access; ↓Downtime;  Security; Scheduling;
Applications
 Disadvantages:
 Space, Costs; Staffing; Capacity; Obsolescence;
Disaster recovery; wrong computers!
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Selecting a Computerized PR System
 Integration & Interfaces?
 Functions?
 Who will need access?
 How will data be processed
 $$$$$$$ -- how much?
 Get input from all users – their needs &
desires
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Selecting a Payroll System
1) Build a Project Team
2) Analyze what the System needs to do
3) Prepare a RFP
4) Select a System
5) Implement the System
6) Evaluate the System’s Performance
7) Controls & Security
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Step 1 – Build a Project Team
 Payroll
 HR
 Benefits
 Accounting
 Tax
 Budget/Finance
 MIS
 Management
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Step 2 – Analyze what System needs
to do
 Document current system and it’s problems
 Define Objectives
 Define requirements
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Step 3 – Prepare a Request For
Proposal
Purpose in issuing the RFP:
 Why new system is needed
 Specific payroll info – size, frequency, unions,
salaried, hourly
 Earnings & Deductions
 Functional requirements now & future
 HR & Benefit integration?
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Step 4 – Select a System
 Ask for demo
 References – either by phone or site visits
 Ask for demo – of certain problems that vendor states
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can be addressed
Ensure all gov’t reports, taxes, EIC can be handled
Ask for demo on client server, not vendor’s
Service & training support and cost?
All costs included on proposal both now & future
Require flexible & user friendly report writer
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Step 4 cont’d: Mistakes to avoid
 Failure to provide time to do the job right by
team members
 Omitting all departments affected on team
 Failure to prioritize
 Not considering future needs
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Step 5 - Implementation
 Preparation – goals, time for team members,
outside consultants?, time for the project,
support by upper management
 Training
 Gap Analysis
 Converting old data & adding new
 Testing
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Parallel testing
System conversion!
Step 6 – Evaluate System Performance
 Internal report requirements
 Unexpected legislation
 Radical benefit changes
 New Unions?
 System expansion
These should be periodically reviewed!
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Controls – Putting them into Place
 System Edits
 Auditing & Data Sampling
 Batch controls
 Correction procedures
 Balancing & Reconciling
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System Documentation
 Include:
 Confidentiality statement;
 Introduction & high level overview;
 Navigation;
 Processing;
 Calendar
 “Guts”
 Leave out:
 Company Policies
 Technical Material
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System Documentation, cont’d
 Packaging
 Assign to a job – not a person!
 Keep it up to date
 Documentation promotes control!
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Useful for cross-training
Procedures eliminate shortcuts
Ensures consistency by users
Providing System Security
 Personnel concerns:
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Segregation of duties
Rotation of job assignments
Paychecks go to payee only! (not to buddy)
Conduct physical payouts – No Phantoms!
Rotate some duties to accounting
Background checks
Security, cont’d
 System Security
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Limit access
Secure files
Develop audit trails
Anti-virus
Backup! – and store off site
Security cont’d
 Physical plant issues
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Climate control
Overheating
Cold
Power surges
Dirt
Humidity
Power
Disaster Recovery
 Fires, floods, hurricanes, earthquakes,
terrorism, explosions: employees still must be
paid!
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Interim Office space
Equipment rental
Temporary housing
Backup files – off site!
Employee safety
Communication
Electronic vaulting
Automated Time & Attendance
 Benefits:
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Less time spent on processing
Fewer errors
Decreased costs
 FLSA, FMLA and SOX compliance
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Results in penalties if not
DOL found – 48% of those audited failed to
comply with federal labor laws!
Selecting a Time & Attendance System
 Rules Engine
 Integration with HR, PR & Accounting
Systems
 Configuration vs Customization
 Web-based
 Alert notifications –
 Secure
 ESS and MSS
 No PC software
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Employee & Manager Self Service
 What is it? – Allows employees and
managers to manage time-consuming
administrative tasks – such as benefit
enrollments, address changes, etc. through:
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Kiosks
IVR
Internet & Intranet
Manager Self Service
 Allows managers to initiate changes to direct reports
 Promotions, salary changes, transfers
 Performance appraisals & salary administration
 Changes can be routed for approval via workflow
 Outsourcing: ASP/SaaS:
 Application Service Provider aka Software as a Service
 Hosted applications – such as Payroll, HR, Benefits
 Employee gains access via their own computer
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Implementing Internet Technology
1. Build a team
2. Select hardware/software
3. Encourage technology use
4. Security
5. Develop codes of conduct
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Web Enabled Applications
 Definition: uses the Internet as a means of
accessing an organization’s data and the
HRMS application logic
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Pay stubs
W-2’s
Keep thinking (and
repeating)……
I will be a CPP!
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