TECHNOLOGY
Top tips for considering whether software can help you Identify the bottlenecks Consider what takes up the most time and whether you can solve this with software: ● can you streamline your data entry? ● do you provide the right information to other departments / parts of the organisation? ● is the payroll / HR software integrated with other organisation functions? Check you don’t already have the functionality Lots of software now offers inbuilt extras – are you using it to its full capacity? For example, many have the capability to produce online payslips, P60s and pension communications. Prove the concept Some suppliers will offer free trials, or can you use something on test data? Review ● when was the last time you evaluated whether your software matches your requirements? ● have you ensured your processes fit the software’s functionality? ● do you regularly review to see what’s available? ● are there policies or procedures which might need changing, and what training might be needed? Be agile ● as software develops, are you up to speed? ● does your solution have a mobile app version? ● what could you change? Do research / phone a friend Get help and support as and when you need it. There’s nothing like a recommendation from someone you know. Consider what others have and if it could help you. You could also research the market or consider whether you need to do a course on tax or payroll-related technology. Keep an open mind Often, organisations think they’re too small to benefit from a software solution as it’ll be expensive, and this isn’t necessarily the case. Do the maths Do a cost versus benefit analysis. There can be huge time savings which enable people to concentrate on other important areas.
“There’s a growing understanding that employers with large or complex workforces need to rely on good policies, processes and controls, rather than manual testing of inputs”
how quickly can you get hours worked data into the system? Many organisations aren’t using the full potential of their enterprise resource planning (ERP) systems, many of which have add-on modules or even free features which combine expense approval, value added tax (VAT) coding and benefit identification. Beyond payroll, the use of dedicated expense software is increasingly prevalent. However, many organisations aren’t using the software to its fullest capability. Ideally, it should have enough categories and parameters to establish both the taxable benefits treatment and the VAT treatment. Categorisation here can be tricky, because the user input comes from the employees claiming the benefits, and they may not understand the nuance. Clear user policies, procedures and process notes are the key to unlocking the full potential of these systems. Once a system is established, the key is to have a clear process map (and positions document) to keep on file to show HMRC, and to have a regular check to ensure the processes are operating as expected. Where something does go wrong (for example, taxable commuting costs being miscoded as allowable travel expenses), the situation should be examined and the process failure understood. For example, if the employee failed to understand the category it should be coded to, were there clear instructions, or was the line manager check not effective? Do policy / guidance documents need changing or is more staff training required? We typically see the pay as you earn (PAYE) settlement agreement (PSA) calculation being done on a spreadsheet, which may be the right answer for your organisation. However,
this relies on the underlying entries being booked correctly to the ERP system trial balance, which again relies on the understanding of the people inputting the data. Much of the work involved in a PSA calculation is essentially data analytics, which can potentially be done better – and faster – by an advanced analytics tool, such as Alteryx. But, if nothing else, it can be used to search large amounts of data for miscoded items to make sure everything that needs to be picked for tax purposes, is. Beyond the specific benefits system, employee benefits and payroll generally should feed into the organisation’s wider risk management system. This may increasingly be automated as organisations seek to put risk management (including tax risk management) into a live online system. One of the options here is dedicated risk manager tools for organisations to maintain their tax risk register across all taxes and tax processes. For those covered by the senior accounting officer regime, this is critical. For example, HMRC recently made it clear that the construction industry scheme (CIS) is covered by this regime, and it’s hard for non- construction organisations to monitor spend on construction operations for the rolling 12 month £3 million test to see if they should register for CIS, unless they have adequate monitoring and controls in place. This is an area of significant change for employers, both in terms of organisation requirements and systems available. We would always recommend standing back and reviewing your systems on a regular basis to ensure they’re still fit for purpose in the context of what’s
available and the ever-changing organisational environment. n
55
| Professional in Payroll, Pensions and Reward |
Issue 94 | October 2023
Made with FlippingBook - Online magazine maker