TECHNOLOGY
T o be human is to always be on the look-out for new and better ways of doing things. We get bored quickly and aren’t very good at doing repetitive things to the same standard, time and again. This is where technology is a real game changer. Technology in payroll can bring improvements in: l efficiency, by handling large amounts of data quickly, minimising delays in payroll processing l accuracy, by reducing manual calculations l compliance with legislation where updates are provided in good time l cost saving, by streamlining processes l accessibility, by providing a portal on which employees can view their payslips l data security l flexibility for growing businesses. Payroll software considerations Payroll software for employers who process in-house is often nuanced and written to appeal to whoever the target customer is. The job of choosing payroll software usually goes to the finance team or human resources (HR). Because there’s a huge amount of data that goes into processing calculations on pay, pensions and absences, the finance team and other departments who are involved in those functions understandably want software to reflect the importance of their own specialism. If you’re in the finance team, you may have chosen to spend your information technology (IT) budget on a lovely bit of accountancy tech, but you have to use separate software for payroll and HR if your accountancy software hasn’t got the facility to process payroll, HR and automatic enrolment (AE) as well. Or perhaps the software has the facility to process payroll, but the functionality is insufficient to carry out all types of payroll calculations without the need for manual intervention, because it’s intended for a small employer with a very simple payroll. Maybe you have chosen HR software to manage staff, but you want it to process the payroll and pensions as well. Can the reports generated also be used by
the accounts team and pension provider without being customised? What about if you’re a payroll bureau – do you provide bespoke reports which work for accounts, HR and pensions? Or can your client log on and pull out the data report they want? “Payroll is used by so many, and across such varied functions, that it can be hard for software developers to be experts in their field and experts in all the areas payrollers are dealing with every day” Not all customers need all the bells and whistles that a program developed for payroll bureaux must have. Some programs will be developed with a particular sector in mind, allowing the developers to concentrate on the specifics applicable to those customers. This ability to focus on the customer’s needs is a very positive aspect of the use of technology in payroll software, though it may come at a cost if the software can’t provide the management information the HR and finance teams need in the formats required. Technology has changed the way we access data in a very positive way and one of the most significant changes for payroll is cloud-based software, as it allows for large files of data to be transferred quickly and securely. It also provides personalised portals so that different users can drop their data in and access the reports they need. Another valuable change in payroll has
been to do with the automatic transfer of information using application programming interface (API) integrations. APIs have been with us for several years now and are invaluable for speeding up processing times. Other improvements in technology, such as two- factor authentication, have increased security features to protect sensitive employee data, along with data encryption and regular backups. But we must proceed with care Of course, there are downsides too. Payroll is used by so many, and across such varied functions, that it can be hard for software developers to be experts in their field and experts in all the areas payrollers are dealing with every day. As payroll appears to be the go-to department for so many jobs, we really need technology and software to help us cope with the workload. We especially need software programs that can work with the other existing functions and not interfere with them, because if the software developers haven’t fully understood everything else that’s going on and how this is being achieved, unintended consequences can arise. A year or so ago, I was using the payroll function on an integrated book-keeping and accountancy software package. The accountants adored the book-keeping and accountancy functionality, but the payroll side reduced me to a gibbering wreck. I put it down to my inexperience with that particular software, but my more experienced colleagues weren’t fans either. We checked every calculation more than once, but despite this, errors were cropping up with the pension calculations. We eventually found out that after the payroll was processed, the AE function had wandered off to have a random chat with the pension company and the result was that the pension calculations switched from banded earnings to total earnings. This was a prime example of payroll software going wrong. Payroll has changed drastically and continues to change. The work payroll carries out has shifted and become more complex, but arguably infinitely more interesting and valuable. Without technology, we simply wouldn’t be able to cope and would still be processing on paper forms and using manual tables to work out tax and National Insurance contributions. n
“The work payroll carries out has shifted and become more complex, but arguably infinitely more interesting and valuable”
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| Professional in Payroll, Pensions and Reward |
Issue 99 | April 2024
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