additional tips to streamline your payroll process

Part Three B: Additional Tips To Streamline Your Payroll Process

Part Three B: Additional Tips To Streamline Your Payroll Process 1024 512 SpinifexIT

Darren Souter shares additional tips on how organisations can streamline their SAP Payroll processes, including considerations for SAP HCM reporting and document generation, payroll testing, and employee help desk.

Previously, I have spoken about some of the areas in payroll that can be streamlined with huge savings possible. The previous section discussed several items including the Payroll Control Center and Reporting within the Payroll System. Today’s article will continue to highlight several key areas that we see everyday in our discussions with our customers.

For many customers, the only method of automated communication to the employees is through their payslips. However, there are often many manual processes that require data within the payroll system.

Some of the following areas have quite a manual process in many organisations:

  • Pay Reviews and Increases – Letters or documents to highlight old/new Pay Details
  • New Hires and Position Changes – Letters to highlight new Position/Job details
  • Changing Jobs / Positions – Creation of new Employment Contracts
  • Termination Letters – Reporting of Termination Pay and Leave Balances
  • Total Reward / Compensation Letters – Document to describe full pay details, benefits and employment conditions

Whilst SAP provides items such as payslips to provide the employee’s payroll information, there is not too much in the way of other correspondence. This is due to the output being different for most customers, and often very unique.

Many of these adhoc requests are often done once a year. For most of these, it’s very much like reporting where there can be quite a manual process around extracting and manipulating the data just to get it together. Once the data is available it will be formatted into a document, letter, or form often with mail merge.

There are a few ways that I have seen customers build these processes. These include:

  • SAP Smartforms / HR Forms – It is possible to build a Smartform, which accompanied with an ABAP report can produce correspondence to the employee. This is often a great way to build the letters and documents your organisation requires. While this has no additional hardware or licensing costs, the downfall is that it requires a developer to build these and then any modifications will require further development work. 
  • Adobe Forms – This is similar to Smartforms, and allows you to build customer specific documents. Like Smartforms, this is a good option, but keep in mind it does require an expert to build these, and in this case, it likely will require additional licence costs.
  • MailMerge – Many customers use mail merge to create letters and other correspondence. This is often passed information from an Adhoc Query, Report or Excel Extract. This is a good way to produce a document that you often need to produce. The downfall is that the data and correspondence often needs to be manually put together.
  • Manually – The above processes each have different levels of automation. The most common process is to simply update word templates or documents manually. This means filling in fields manually with data from SAP. This is the most manual and error-prone process and whilst it will be good for minimal letters per year, it has the most overhead, so should be avoided when possible.

Employee Correspondence can be an area for streamlining your process as it often needs an expert to produce this type of report or document. Automated options such as SmartForms or AdobeForms will still require additional overheads of technical resources if any changes are needed.

CONSIDERATIONS: If you checked any of these, you might want to look at your document production processes.

SpinifexIT and Document Creation

Over the years, many of our customers have needed to provide complex information to the employee that needs to be formatted differently to a report. This is often output in the form of a PDF document that can show the data mixed with wording, graphs, pictures etc.

Through SpinifexIT’s Easy Documents and Stratodocument solutions, we have delivered to customers documents such as Total Rewards Statements, Employment Contracts, Statement of Earnings, Statement of Employment and Pay Review Letters.

These documents can be accessed through our Web Front end at the click of a button, rather than relying on older approaches including printing and distribution of documents.

Whether you are on-premise or in the cloud, you are going to have updates to your SAP environment. Legislative changes, new SAP versions, etc., will be loaded in throughout the year. If you have moved to Employee Central and/or Employee Central Payroll, suddenly your upgrades could be happening much quicker than your previous on-premise world. 

Whilst in many areas, you can just accept updates, the recommendation is that on the Payroll side, it is important to still have a process around checking these upgrades and updates. Especially as customers can have custom rules within Payroll, it is important to verify that this all works with the new functionality.

Things to consider here are:

  1. How to best check that the Payroll operates correctly after upgrading to the latest support packages
  2. Checking Year-End – There is often a need to reconcile the year-end figures before completing the year end process. This can often be a large and complex process.

One recommendation that I have seen many customers use is to have a process around these types of upgrades. One of the best processes I have seen many customers adopt is to ensure that in a TEST environment, the payroll runs the same after an upgrade as it did before.

The best way to do this is to have a process to extract all payroll wagetypes and compare that they are exactly the same before and after the upgrade. Whilst this is a manual process of extracting and comparing in tools such as excel, it is the best method I have seen to validate that the payroll is still producing the correct results. NOTE: This should be performed with results that are the same or close to production data.

We would recommend being aware of these and talking to your implementation partner if you have any concerns that you might be at risk with any of these areas.

CONSIDERATIONS: If you checked any of these, you might want to talk to your implementation partner about how to streamline this better.

SpinifexIT Tools To Streamline Update Testing

Whilst most of the payroll checking process can be done manually, there are always better ways to do this. Many of our customers use SpinifexIT’s Easy Reporter solution to do before-and-after data comparisons in their system. 

In addition, SpinifexIT’s Easy Clone allows you to copy groups of employees directly from a production system to a test system without the need for doing a full system copy. This is often a very useful process that streamlines testing of these upgrades as you can pick a group of employees and always have 100% accurate production data in your test (and even development environments).

It is more on the rare side that a customer would go live with all HCM functionality in one go especially when a customer has multiple companies, entities and countries involved.

Therefore, as part of any implementation and support of an existing system, you should always consider that there is the need for continued roll out of functionality. Whilst this shouldn’t affect your existing system, those of you who have been through this would often know that there is often unwanted side effects from new countries.

It is just something that you should be aware of if you end up implementing new payrolls, or countries into the future especially when trying to alter existing configuration and/or settings for a new country (might also affect other countries if using common functionality).

Any upgrades to configuration should have a simplified process to check this. Being able to do before/after comparison of payroll results is very important to ensure that there is nothing broken with the new configuration.

I have decided to put a section on Year-End processing even though this is similar to reporting and reconciliation. But since it is a once per year process, and quite complex, we often talk to customers specifically about this process and how they handle it.

Whilst Payroll will pay the employees and SAP will also provide any legislative reporting needs around year-end, most customers have a manual process to reconcile and verify that payroll figures match the year-end reporting.

As this is often a time-consuming process, many customers have developed complex processes to check their year-end figures, often involving many extracts of data, excel manipulations etc. In most cases I have seen, this often involves running reports such as wagetype reporter to extract data out to a tool such as excel, and then comparing these values back to the values reported on the year-end solution. This is to have a process to validate the payments you have made to the tax office throughout the year.

This reconciliation also often needs to be done within a thin timeframe and is generally a different process for each country. Most customers have some sort of process, whether it is manual, an ABAP program or even something that SAP provides. No matter the way you reconcile, I would highly recommend to have a more optimised process here because most of the year-end reporting is based on configuration and it is often easy to miss something and not have it reported to your tax authority.

Year End processing checklist
CONSIDERATIONS: If you checked any of these, you might want to talk to your implementation partner about how to streamline this better.

SpinifexIT and Year-End

The Year-End process has actually been one of our early key areas of time savings for customers, and currently, we have a streamlined Year-End product for Australia, United States and Canada.

These solutions build on top of the standard SAP processes and streamline many of the areas that you might today have many manual steps around. Things like Reconciliation, Reporting on Year-End Figures, Distribution of Information out to the employees and many others are included in these solutions.

You may view our solutions for Australian Payroll Reconciliation and US/Canadian Payroll Reconciliation by clicking these links.

Many organisations do not consider this is something that they would streamline, but each pay, there are often many questions coming back to the Payroll Team (or a specific help desk team) with payroll queries. Some examples may be

  • Why has my pay gone down?
  • What is this Retro pay?
  • Is my tax correct?
  • How can I check if my leave balance is correct?

Many of these questions (and there could be dozens of variations), take time to investigate, analyse and report back to the employee. Often, having reports or letters available to answer these can help out, but it often isn’t considered as these are often adhoc requests.

Unfortunately, there is no easy standard answer to many of these types of scenarios, and in most cases, it comes down with having experts available to answer these questions or to investigate issues. Where you can, I would suggest looking at common requests and looking at ways to streamline how you answer these. Whether this is by using existing SAP reports to investigate, letters in pre-defined formats that can be filled in to help answer/explain queries or or just procedures on how to investigate some of these items. Without this mindset to look to improve your efficiency, then this will always be an overhead to your team.

Employee payroll queries checklist
CONSIDERATIONS – If you checked any of the following, you may have room for improvement with your help desk and query resolution

The above are just some of the areas that I have spoken to customers about over many years and hopefully gives you some ideas on areas that you might be able to focus on streamlining your day to day. 

Even today where we have customers moving part of their data into the Cloud, and even in many cases moving the payroll to the cloud (Employee Central Payroll), we see that these same processes that can be overheads to most customers can be streamlined.

SAP have made good progress through this streamlining with tools such as the Payroll Control Center, but in addition, SpinifexIT has specialised in this area and comes with great products and processes for further streamlining your payroll.

We would be happy to talk to you about any of the above processes and potential ways to streamline these items. Contact us at info@SpinifexIT.com or visit our website to book a discovery call.

You can also reply to this post and I’d get in touch with you the soonest.

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VIEW RELATED ARTICLES

  1. Considerations for Payroll During Cloud Migration
  2. Payroll Considerations During an Employee Central Implementation (w/ a free downloadable checklist for you and your implementation manager)
  3. Streamline Your Payroll Process (Part 1)
  4. Additional Tips to Streamline Your Payroll Process (Part 2)
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