How HCM Can Improve Your Payroll Process

September 8, 2018

For most companies, and most pay periods, payroll is unnecessarily dramatic.  The reason is that there are too many different systems involved in the process.  When data has to be moved from one system to another, these extra steps can quickly become disastrous when it involves a vital business process. Think about each of the steps that go into your pay cycle.

  1. Employees record the time they work, either by clocking in and out or simply writing their time on a payroll slip
  2. Supervisors verify that this time is correct. They also make any updates or additions that are needed, such as sick time.
  3. Someone in payroll gathers this time and compiles it into a report. Someone else double checks for errors, such as missed PTO time and incorrect cross clocking between departments and locations
  4. The final report is used to process payroll, resulting in a mix of physical checks and direct deposits
  5. Someone makes sure that the pay run goes smoothly and correctly
  6. Someone (or usually multiple people) makes the inevitable calls about missing time, incorrect paychecks, and other errors

Given all of these steps, each pay cycle is something of a mini-miracle. And these steps are for a hypothetical pay cycle with no variances (such as commission or paid holidays) and no administrative changes (such as mandatory or voluntary deductions). This scenario also doesn’t factor in incompetence, bias, dishonesty, or the absence of a key person or two. Absences in particular can be a serious problem in small or medium-sized businesses where there may be just one key person who truly understands the payroll and time collection process. If that person goes out on a leave of absence or even just a vacation, things can really go wrong. Adding people to the process, especially when they don’t perform their expected function, only increases the opportunity for error.

Back Office Functions are Important to a Business

We often think of “back office functions” like payroll and benefits as an afterthought when it comes to business as a whole. But a business is made up of people, and when your people are worried about things like whether their paycheck will be correct, or whether their children are truly covered by company insurance, they won’t be completely focused on their work. Making sure that these administrative functions work smoothly is extremely important. Otherwise, you risk these errors becoming an unnecessary drag on your payroll system and, by extension, your business as a whole.

By bringing all of the functions necessary for payroll under one system, you can reduce errors to the point where any impacts are relatively small, easily contained, and more quickly resolved. Using the right payroll software, you can handle time and attendance, update payroll tax deductions as needed, and complete payroll audits without ever needing to access another system.

There was a time when such a solution would have been written of as wishful thinking.  But with today’s technology, it’s not a day dream anymore. With Human Capital Management, or HCM, you can bring all of the details of Payroll together.

Think about your last episode of payroll drama. Remember how many upset employees you had and how much money was wasted, both in the cost of recalling direct deposits and of reissuing paychecks, as well as time spent trying to find and address the problem? Now consider how your company would benefit from having an integrated system that doesn’t involve transporting data from one platform to another, and that doesn’t rely on one or two subject matter experts to complete a business-critical function correctly the first time. This is what HCM, can do for you. But more than that, HCM goes beyond payroll to bring other parts of your administrative system together.

For more information on how Commonwealth Payroll & HR can work with you on your strategic human resources planning, call us today at 877-245-1159.

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