Part Three A: Streamline Your Payroll ProcessPart Three A: Streamline Your Payroll Process https://spinifexit.com/wp-content/uploads/2019/03/SpinifexIT-blog-streamline-your-payroll-process-1024x512.jpg 1024 512 SpinifexIT https://spinifexit.com/wp-content/uploads/2019/03/SpinifexIT-blog-streamline-your-payroll-process-1024x512.jpg
If I was asked if I have ever seen a Payroll Team that has no room for efficiencies, I would have to say no. It is not to say that I do not see many totally smart and efficient processes, but with Payroll, there is always new challenges and changes, which means it is an often evolving process.
This blog will focus on some of the areas for efficiency where I have seen customers totally streamline their payroll. This means that they can do much more with existing resources and focus on providing many value adding solutions rather than just processing the payroll.
You will get the most out of this blog if you are using or planning to implement…
- SAP Payroll On-Premise
- Employee Central Payroll
- Payroll using a managed service provider (ADP, NGA)
- Running SAP Payroll On-Premise with Master Data in Employee Central
It is not always clearly known within an organisation, what it takes to get the employees paid. Whilst we would like to think it is is just a matter of hitting a magic button on pay day, it is never the case. Especially in the world of today, things get more complex and payroll is one of these.
Most companies have Payroll across multiple Countries, many Payroll Frequencies, Full Time Part Time, Casual Employees and many of these employees with individual employee pay agreements or with complex pay rules. Many customers have external Time and Attendance Systems feeding their payroll, and now many customers have integration from Employee Central to Payroll.
Phew – I feel tired just thinking about it.
In order to process a payroll, this often involves several days of data entry, trial payroll runs and validations leading into the payroll run, just to ensure the calculations are all correct.
Then, once the pay has been run, it is all over…?
No luck – This is when further processes need to take place. Things like distributing reports out to management, creation of pay statements, reconciliation of payroll (often local things such as taxes, vendor payments and other tasks such as year end), interfaces to other systems.
Along with these items, the payroll team often takes Helpdesk queries from employees on their pay (low pay, high pay, certificate/form requirements, etc). In some of the customers I see, this can be several hundred to several thousand calls in a month. In many cases, a team is specifically set aside for handling pay queries.
Then finally, there are key things throughout the year, such as pay increases, hires/terminations (often in mass), and year end processing. You also have the occasional updates and changes to calculations, and/or new payrolls coming on (as might be the case with a new acquisition or even merging multiple payroll solutions).
Most of us only see the paystub at the end of each week or month, but there is a lot that goes into getting this right. Now I really feel tired just thinking about the Payroll Teams around the world!
Making the Complex Simple
As I have visited many customers over the years, one of my interests, is to hear from customers about how they do all of these tasks in a normal week. In many of these cases, there are specialists within most organisations, who simply don’t go on leave at certain times of the year as they just can’t hand this off to anybody else.
Regardless of the area, I have always been interested in how to make it more efficient. This is why 15 years ago, I started to develop add-on solutions to SAP, of which I am proud to say are being used daily within hundreds of companies in most major countries around the world. These solutions have always been built directly with the customer in mind and over the years, these have evolved to a comprehensive set of solutions.
I will reference some of these below, but even if you are not interested in add-on tools, the following will give you an insight into some of the areas that you may be able to look at, to streamline a payroll department, in some cases just with standard SAP processes that you may not be currently using.
Ok – Lets start to look at some of the areas for improvement.
Changing the Mindset – Running Payroll (Payroll Control Center)
One of the key items that I hear when talking to customers is how they talk about Employee Central, and how this will change the way the employees are engaged with the HCM system. The User Interface is fantastic for giving an easy method to access the data, and the employees can update most of the data themselves.
The ability for employees to view and update the system directly gives a huge improvement to the way they can interact with the system.
However, at the same time, when I visit many of these customers, from a Payroll perspective, it is very common that the Payroll Team is still logging into the SAP system through SAPGUI screens and executing Payroll directly from here. Other customers may be using WebGui, or NetWeaver Business Client (NWBC).
However, it is not really changing the way how the Payroll Team work day to day.
There are some good things to consider though. One of these is a newer Payroll Solution that SAP delivers in the latest releases called the Payroll Control Center.
This has been around for over 3 years now, and over this time I have been privileged to have seen it’s evolution from the initial concept of a streamlined way to check and examine payroll errors to then being able to execute the payroll process. Over this same period, the configuration and setup of this tool has been made simpler, and I believe it is now a solution that customers can greatly benefit from.
The Payroll Control Center allows you to now run the end to end payroll process (including identifying and examining payroll errors), all through a nice user interface that can be executed directly from Employee Central.
One real benefit of this, is that the upskilling of a new employee in the payroll team can be much less as they have a clearly defined process and simpler steps for running payroll. Especially if you have a complex payroll with multiple steps and different countries or payroll areas, where the Payroll Control Center can cater for these in a defined process.
I believe the Payroll Control Center is now something that most customers should consider if they are looking at options to streamline some of their payroll processes.
SpinifexIT and Payroll Control Center
SAP Delivers a standard Payroll Control Center Rapid Deployment Solution, which means you do not have to setup everything completely from scratch, but this still requires an implementation and a fair amount of Technical Expertise, especially if you want to customise the Validation Checks.
As an alternative to the standard SAP Solution, SpinifexIT has built our own Pre-delivered solution which leverages off of our Easy Reporter for quick deployment (With no technical knowledge) of the payroll validation checks. We have also built in many additional functions on top of the standard Payroll Control Center solution to streamline how this works and integrates into your day to day processes.For more information about the SpinifexIT Payroll Control Center Add-on, please click here.
Streamlining Payroll Reporting and Reconciliation
Almost every customer I visit will have some overhead for reporting internally. This need is constantly growing each year, as most customers are looking to use the information in the Payroll System to make better business decisions. Some examples of areas that are increasing in demands include
- Greater need for auditing payroll, especially due to more complex employees
- Need for getting information out to managers to better run their business
- Creation of extracts into 3rd party solutions (Vendor Deduction Reporting is one example)
- Reconciling Payroll
Standard Reports – SAP already delivers quite a few reports that cater for many of your common needs. Reporting of Wagetypes, Leave Balances, Infotypes and many other areas are all possible. However, when the standard reports don’t quite cater for the customer need, there is often the need to turn to other methods. Make sure your team checks for standard reports before looking at other options. Reach out to your implementation partner if your team is unsure what reports are available.
Adhoc Query – Many report requirements and especially those with Employee Master data, can be built through Adhoc Query. This tool allows your team to build the reports required without needing to resort to manual processes or custom development. This is a great way to build any reports your team may require, without much overhead.
Excel – The most common and simplest, but brings the most overhead. The common process is to run several existing SAP reports and extract the data into local files. These files can then be loaded into Excel or similar tools to create the reports or analyse the data as required. Sometimes this is the only quick and easy way to produce the reports you require. Keep in mind though that this can have a lot of manual work and overhead to create the reports, not to mention, susceptible to errors.
Custom Reports – Whilst this can be a time consuming process, many customers here turn to custom development to deliver what they want. This might be to get data which is not available through standard reports, or to build the formulas required, or just to simply display the report in a nice web format. This is a great way to streamline your reporting where you might currently have a lot of manual steps to create a report.
Lastly, whilst many of the report needs are at the company level, there is often many adhoc requests from different departments and managers for information throughout the year. These requests are sometimes once off or recurring every pay or monthly. All of this can add much overhead to the payroll team. Often there is no way around these adhoc requests. If possible, try to reuse some of the above processes, especially if these adhoc requests start to become common requests.
SpinifexIT and Reporting
This is an area that SpinifexIT has specialised in for over 15 years. Payroll Reporting and Reconciliation are part of the core value add solutions that SpinifexIT provide.
The existing SpinifexIT Easy Reporter has access to the majority of the Payroll HCM data, and over the last few years, has made this data accessible through the Web Reporting menu. This allows execution of reports directly from Employee Central which then gives employees or managers direct access to some of the core payroll information.
These reports can be accessed through our Web Front end at the click of a button, rather than relying on older approaches such as ABAP, or Extraction of Data and manipulation in Excel.
This blog has given an overview of some of the areas that can be streamlined in SAP HR and Payroll. There are many other areas that can also be streamlined, and these will be described in the second part of this blog. This will include areas such as
Streamlining SAP Upgrades
Dealing with Configuration Changes
Year End processes
Helpdesk access to data to answer employee queries
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 there are still many manual processes around the payroll team which could 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.