CPP Review '08 - Chicago Chapter APA
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Transcript CPP Review '08 - Chicago Chapter APA
Section 12 –
Payroll Systems &
Technology
Rachel Brooks, CPP
Implementation Consultant
Paylocity
[email protected]
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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:
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
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:
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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