Four Modern Payroll Challenges

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By Jacob Maslow

The following four challenges are among the most common issues for payroll departments today. Check out the tips on how to overcome them. These issues represent a range of challenges, from payroll systems and reducing costs to remaining compliant with ever-changing requirements.

Payroll is Undervalued

Payroll is typically taken for granted in many companies — unless something goes wrong. Most employees know little about the important function payroll fulfills. At best, it’s seen as an administrative burden that provides no added value beyond paycheck generation and timekeeping.

This is more of an awareness issue, but it’s an uphill battle getting stakeholders to take a deep interest in the system. Therefore, conversations about payroll are necessarily kept at a very high level outside the payroll department.

Software Limitations

Commercial payroll software packages present two major issues:

1) Most payroll software has limited functionality and can’t provide a comprehensive solution.
2) Some payroll software has the needed functionality but no one can figure out how to use it appropriately.

When choosing a payroll software, leaders should document the desired functionality, including any future functionality that can be ascertained. The software solution needs to be versatile enough to handle any changes to legislation or the business that impact payroll. This lets the payroll group use the software to its full potential and remain in compliance.

Comprehensive solutions should have the following payroll services straight out of the box:

  • Intuitive payroll processing workflow
  • Online report access
  • Unlimited custom reports
  • Unlimited direct deposits
  • Year-end tax reporting
  •  Local, state, and federal tax withholding

Staying Current in an Ever-Changing Environment

Changes in a number of categories make it tough for payroll employees to stay current. These categories are:

  • Technology – tablets, smartphones, cloud computing, digital payslips
  • Legislation – Payroll employees and systems must remain compliant to local, state and federal legislation
  • Work habits – Career mobility, telecommuting, remote workers
  • Environmental – increased corporate social responsibility, sustainability initiatives

Cost Overruns

To run an effective payroll department, there are a variety of related costs: software purchasing and licensing, training and development for required changes, and hiring staff to make it all happen. An effective payroll system easily transfers to financial and reporting systems to avoid duplicate entries and data validation across multiple systems.

As well as savings on the technical side, payroll leaders can challenges employees to vet out ways to move toward a paperless office and adopt cost-saving practices that support the company’s sustainability vision.

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