COMPLIANCE
to analyse where the challenges we’re countering might occur. I tend to split the challenges into three groups: ● resourcing ● systems ● legislation. Resourcing challenges are the most common issue I’ve encountered. This means that the main, or multiple, resource(s) involved in running your payroll are unavailable. This could be when the Payroll Manager goes off sick or the whole team enjoyed the company party a bit too much. But for whatever reason, your main source of knowledge and process understanding is unavailable. As most of us in payroll know, it isn’t a role you can just hand to an untrained employee and ask them to follow a guidebook, especially for a payroll with any sort of complexity. The person charged with picking up the payroll process should have a BCPP available to them to ensure they have the right support. System challenges are also commonly seen, which is where payroll teams are unable to function due to their payroll system (or any area connected with the payroll such as time and attendance or banking) not allowing the process to move forward. This should all be covered in a BCPP. The last area I group other challenges in is legislation. This could be anything weird and wonderful such as last-minute
HM Revenue and Customs updates, issues with compliance or even cyber-attacks. Every potential issue should be accounted for in the BCPP. How do we put this together in a plan? The first step is to fully understand every single piece of your payroll puzzle. My best suggestion here is to hold a workshop with stakeholders and create a map on the wall with sticky notes, or Post-it notes, depending on what you call them. From the very first thing you do in a payroll cycle, every action gets a sticky note. Every report you download, every file you upload, every check you make – put everything on a separate sticky note. You can colour co-ordinate for different areas of the payroll such as trial runs, final runs and bank file uploads. This map should show every single action or check that’s done throughout the cycle, be that week or month, to give you a crystal-clear map of your payroll process. You’ll need to document this thoroughly.
countermeasures might include training team members to back up the role or hiring a trusted third party to provide emergency coverage. If you do use a trusted third party, you should always check for certifications and ensure they have the necessary skills and experience to provide expert coverage. If you have a payroll with low complexity, you might be able to pay employees using last month’s Bacs file. However, this will have serious implications for employees with variable pay and will require additional work to correct any changes. You might also look at reducing risk by conducting a health check on your payroll system and process. Real life scenarios A client of mine failed an audit as they had only one person with the access and competence to run a company payroll of over 600 employees. The client enquired about backup options, as they were concerned about the payroll department. We mapped a BCPP and agreed to provide payroll coverage as we had experts on the system in question. A month later, the key member of the payroll department left suddenly, as suspected, which meant the client activated the BCPP and engaged our emergency resource. We ran the payroll for six months which allowed the client to recruit, onboard and hand over payroll to that person. They retained the backup option with us. n
Vulnerable points and countermeasures
The next step is to highlight vulnerable points and insert countermeasures. Vulnerable areas could include connected systems such as time and attendance or bank files, and you should detail the actions you’ll take if the standard process cannot be achieved. Common
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| Professional in Payroll, Pensions and Reward |
Issue 112 | July-August 2025
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