COMPLIANCE
that time. For larger employers, payroll systems which allowed input directly to the computer had been around since the 1970s. These were still very crude by modern standards though. Input was made on terminals with screens which contained only text and were navigated using a keyboard. Frequently, the screens had a dark green background and text which was a lighter shade of green, leading to the term ‘green screen technology’. Crude though it was, this technology allowed input much faster than before. This, along with faster processing of the payroll calculation, made deadlines easier to meet. Following the rise in direct-to-bank payments, payroll deadlines were arranged around the Bacs processing timetable, a practice which persists to this day, although it’s gradually changing, thanks to Faster Payments. “For larger employers, payroll systems which allowed input directly to the computer had been around since the 1970s” The advancement of technology in the 1990s Things moved quickly as the processing speed of computers increased exponentially and their cost reduced. Systems with a Windows user interface, navigated using a mouse, came to the fore during the 1990s. During this period of rapid change, those working in payroll had to adapt to new systems which were often hugely different to what they were used to. I remember providing training on a new Windows-based payroll product, and part way into the session one delegate admitted, with some embarrassment, to having no idea how to use a mouse. The
previous system had been ‘green screen’ based. This was a valuable lesson to me not to make assumptions about the skills of delegates! During the ‘90s, integrated payroll and human resources (HR) systems became more popular. Prior to this, HR and payroll systems were often separate and employee data was maintained in each. Implementing an integrated system into such an environment was interesting, as the data common to both the HR and payroll systems was never 100% in sync, and numerous discrepancies had to be resolved. In most cases, the payroll data turned out to be accurate. This integration had a downside. Everyone entering data had to understand payroll deadlines, and that input couldn’t be made while the payroll was closed for processing. This was a challenge and many a reconciliation error arose because someone changed something after the cut-off. In response, system developers introduced ways in which changes could either be prevented at this time or their impact be deferred until the following payroll period. And into the 21st century… In the 21st century, the biggest change has been the advent of ‘the cloud’ and the move to systems being accessed via a web browser. Using a cloud system means that the data and processing capabilities are held by the system provider, although, of course, the data still belongs to the end user. This has many advantages over doing things in-house, not least because securing the data and ensuring system availability becomes the responsibility of the provider, who specialises in this area. The use of browser-based systems allows them to be accessed from anywhere, using any web-enabled device, rather than just from specific devices in an office. This was crucial when Covid-19 hit and most of us found ourselves working from home. It has other advantages too. For instance, the ability to access payroll via mobile devices has allowed employee self-service portals to be deployed, where employees can see things like payslips
and P60s, and enter their own timesheets, expense claims and so on. These capabilities continue to develop. For instance, some systems allow employees to clock in and out using their mobile device (or devices such as a door access system), and the payroll then generates the appropriate payments. It considers different rates of pay for specific days (weekends, bank holidays, etc.) and times of day (unsocial hours payments etc.) without any manual intervention. This is a world away from the days where each individual payment would have to be manually input. “In the 21st century, the biggest change has been the advent of ‘the cloud’ and the move to systems being accessed via a web browser” What does the future hold? As for the future, well, who knows? Certainly, the facilities available in payroll systems will continue to advance and payroll teams will be freed to add value to the organisation. As an example, the end- of-period calculation of pay is becoming a thing of the past. Systems will calculate an employee’s pay every time a change is made to their data, in real-time, so everyone’s payslip will always be up to date. The monthly payroll ‘run’ will take much less time as it will be limited to things which are still batch-based, such as producing the regular payments to employees’ bank accounts as well as generating the FPS and other outputs to HMRC and third parties, which still require a periodic payment. Payroll will continue to evolve in ways it’s hard to conceive. If you’d asked someone starting a payroll career in 1975 what they thought the job would be like in 2023, it’s pretty unlikely they’d have predicted what we actually have today! n
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| Professional in Payroll, Pensions and Reward |
Issue 90 | May 2023
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