Payroll insight
Authorising payment claims
Neil Tonks, of MHR’s legislation team, opines that a change of mindset and procedure are required
I n recent times, the way employees claim payment for things like overtime and expenses has changed. Gone are the old paper forms or spreadsheets replaced by self-service portals where employees enter the claims directly. However, the processes which go along with these transactions have often remained relatively unchanged, which makes us ask a rather controversial question – isn’t it time to trust your employees? Often, managers are required to authorise every item claimed by the employees who report to them. The ways of achieving this will of course differ depending on the payroll system used and the employer’s own processes. The one thing which is always the case, though, is that it takes time to do these authorisations. Time which the people involved could spend doing more productive things. Ask yourself this question (or, better still, ask your managers): how many times is a claim which has been submitted by an employee rejected by their manager? In many organisations, the answer to this question will be ‘very, very rarely’. If your managers are in this position, they’re wasting time by going through a raft of claims each pay period, only to click the ‘approve’ button in every case. They’re also not very effective in doing what the process was designed to do – weed out claims which are, by accident or intent, incorrect. This is because after a while, most people will simply approve the claims without actually scrutinising them. It’s human nature – a busy person will ration the time they spend on a which needed to be re-keyed or imported into the payroll system,
task, and if they trust their employees – even if the process doesn’t – they’ll just approve things ‘on the nod’ because it’s quicker. There are alternatives to this approach, and it doesn’t mean opening the floodgates by scrapping all approvals. There are a number of techniques, which can be combined if necessary in order to develop a strategy which helps prevent erroneous claims getting through without overburdening the managers. ...make a saving by freeing up management time, and also improve employee engagement... One option is to turn the process on its head and make claims go through automatically unless the manager intervenes to stop this. The manager still needs to be able to view a summary of claims so they can spot any they don’t like the look of, but they don’t have to take any action regarding the ones they’re happy with. Another option is for only claims which exceed defined parameters to need approval. This removes all the routine stuff from the manager’s task list and lets them concentrate on the ones which deserve scrutiny. Enforcing limits on claims is another item in the toolbox. If you have a limit on the amount that can be claimed for hotels, meals etc, then set up the system so that employees can’t claim over the odds for these items. A limit on weekly overtime hours can also be helpful –
after all, most people won’t work fifty hours of overtime in a week, so why let them input it in the first place? To go down this route your system needs the ability to define this type of policy at a sufficient level of complexity. For instance, you may need different policies for different groups of employees. If you want to allow exceptions, consider combining the previous techniques. So employees can enter values over the normal limits, but have to consciously do this and enter text to explain why the claim is more than is usually allowed, and the item then goes for approval. Another useful technique is the use of ‘spot checks’ where someone randomly checks a sample of claims to ensure that they look reasonable and are backed up with receipts where appropriate. If well- publicised this can be very effective, not only because it happens but because the fact everyone knows it happens makes it less likely that anyone will chance putting in an exaggerated claim. These techniques won’t suit everyone, of course, and whether they can be implemented also depends on the facilities available within the human resources/payroll systems you use. But if you can adopt some of these techniques you can make a saving by freeing up management time, and also improve employee engagement by making the employees feel more trusted. Any changes need to be properly communicated, so everyone understands the process. You will also need to involve your auditors or legal advisers, since there are legislative or regulatory rules in some business areas (such as financial services) which may limit what can be done. n
15
Issue 30 | May 2017
| Professional in Payroll, Pensions and Reward |
Made with FlippingBook - Online catalogs