5 Ways To Streamline Payroll & Avoid Payday Disasters

December 7, 2022

Avoid Payday Disasters

For employers, ensuring the appropriate distribution of employee compensation and maintaining compliance with the DOL’s related regulations is a vital part of running a successful business operation. To initiate their efforts to streamline payroll, employers should start by aligning their company’s payroll procedures and processes with other essential HR functions. To help employers uphold payroll processes that ensure disaster-free paydays, we’re covering five ways to maximize streamlining efforts while minimizing costs and compliance risks. 

#1 – Let payroll reside under the umbrella of a Human Capital Management (HCM) system.

In general, the way a company approaches payroll falls into one of two camps: Camp Collaboration or Camp Wilderness Survival. Collaborative campers view payroll as one function that’s integrated into a larger HCM system. The HCM dictates the interplay between all the right moving parts, from strategic workforce & compensation plans, time & attendance tracking, and scheduling procedures to benefits administration and employee self-service. These campers are more inclined to approach payroll with confidence, knowing the next payday will come and go like all the others – without a hitch.

On the other hand, wilderness survivalists often view payroll as a “lone wolf” function, which can prove to be disastrous. Because this approach inhibits overall transparency, it often leads these companies to adopt a reactionary approach to issues and challenges. If you’re spending all your time putting out compliance fires, you’re simultaneously limiting your potential for business growth, missing opportunities to increase productivity and efficiency, and leaving your company and your employees vulnerable to unnecessary risks. 

#2 – Take inventory of your payroll and other HR processes and assess whether they are meeting your company’s needs as well as the needs of your employees.

Manually tracking and maintaining business and employee data can be a dangerous game. Posting a hand-written schedule in the breakroom probably wasn’t a big deal when you first started out. Perhaps the same could be said for tracking compensation and benefit data on a spreadsheet. But, typically, it doesn’t take business owners long to realize the efficiencies, increased margin for error, and the impact on employee productivity associated with these methods, especially as their companies continue to grow.

Review your software, technology, policies, and procedures – with your company and your employees in mind – to ensure the methods you use to collect time, manage PTO, schedule jobs or employees, and track employees are meeting the necessary requirements and expectations. This inventory is particularly critical for companies with remote or hybrid workforces, as the requirements, needs, and expectations may differ based on the work environment. 

#3 – Actively seek technologies that automate manual functions, integrate with other software, and promote employee self-service.

Automation can also support evolving interdepartmental needs. For example, by automating time tracking for employee hours and earnings, you can reduce the risks associated with intentional or unintentional breaches in compliance while reducing your accounting department’s time, resource, and cost expenditure when tax season begins. 

Integrated solutions can save you time and money and help you avoid human errors because they allow you to store data in a centralized location, and you only have to enter data and updates once, so duplicate information does not exist in multiple locations, outdated files, or varying versions of the same document, and updated information and details are not hidden or lost across archived emails or inactive accounts. 

More and more, employees expect real-time, flexible, mobile and web-based time recording and scheduling capabilities, online access to their payroll and benefits information, and electronic notifications, which means automation can support employee satisfaction and productivity. Concerns related to data security and protection are on the rise as well. But automated solutions can help you ensure that all sensitive data is encrypted and protected by passwords.

#4 – Close the gap on compliance risk.

Taking timekeeping into account will help you maximize your efforts to streamline payroll. One of the most significant areas of DOL scrutiny and compliance enforcement relates to key wage and hour laws. Depending on your location, you may be required to pay overtime at 40 hours, or you may be required to pay it daily. In addition, employers need to understand and comply with the appropriate notice and payment requirements associated with “showing up” for shifts and even canceled shifts in some places. 

Timekeeping and payroll regulations differ depending on where an employee resides, whether the employee is a member of a union, whether the employee is job costing, and what type (or combination of types) the employee is, including exempt, non-exempt, part-time, full-time, tipped (sub-minimum wage), or non-tipped. But, by implementing the right automated solutions, employers can automatically categorize employees into the correct groups.

It’s critical for employers to establish, standardize, automate, and enforce a method for monitoring, understanding, and taking appropriate actions based on the impact of new legislation, most notably for updates associated pay rates and deductions, employees into the correct groups.

#5 – Reach out to a qualified professional.

At Commonwealth Payroll & HR, our payroll, timekeeping, scheduling, and other HR and HCM solutions help employers keep their employees happy and productive, improve the efficiency of their operations and procedures, and reduce their vulnerability to compliance risks – all of which can help you cut unnecessary costs and increase revenue. Contact Commonwealth today to learn how we can help your business streamline payroll and align all of your HR functions with an HCM system that helps your company thrive!


*The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. This article contains links to other third-party websites provided only for the convenience of the reader.

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