Payroll Software and People Management blog

Outsourcing payroll processing to an external provider still remains a very popular method among businesses of ensuring this critical function is completed effectively. As a result, there is currently a multitude of payroll outsourcing organisations available, each with their own strengths and weaknesses.

Choosing the right provider for your business is an important process and many find that a thorough examination of your short-listed payroll outsourcing bureaus pays dividends in the long run. To help you during this stage, we have composed 5 questions below that should be asked to all candidates to ensure there are no hidden surprises once your choice has been made.

Do you charge for every payroll change made?

An organisation’s workforce is constantly changing, from adding new employees, to changing salaries, contact details and bank accounts of current staff, to terminations. One of the consequences of this reality is the subsequent alterations that need to be made to the payroll to reflect these changes.

Bearing in mind the amount of modifications that could accumulate during the space of one pay period, discovering how each payroll outsourcing service charges for these adjustments often proves to be a prudent decision. This is especially true for those organisations with a higher number of employees, which obviously results in more changes being necessary from week to week.

What reporting options do you offer?

Every business is different and accordingly each has its own unique set of requirements. This also applies to payroll reporting, where all organisations have their own individual needs, typically including both standard reports plus more advanced, personalised versions.

It is important that you clearly understand how each payroll outsourcing provider structures their report offerings and what options are available to you. Knowing exactly which reports are included with your monthly fee and also what others are available along with their cost will help you to discover whether your company’s reporting requirements will be met cost-effectively or not.

Are there penalties for cancelling the agreement?

Unfortunately businesses can sometimes make the wrong decision and find themselves with payroll outsourcing providers that aren’t meeting their needs. The problem can also be compounded by the company being locked into a long-term contract with heavy penalties for early termination.

To avoid the possibility of falling into this situation, it is always a prudent course of action to ask all prospective payroll outsourcing providers what the terms of their service agreements are. Enquiries should also be made about whether there are any break costs if you decide to end your association with the provider earlier than expected.

Finding an outsourcing organisation that provides flexible terms has many benefits. Not only does it obviously empower your company with the freedom to change your payroll outsourcing service whenever you like, it also ensures that your bureau will work harder to retain your business.

What are your disaster recovery capabilities?

Will your payroll data be protected in the event of a disaster? It is imperative for all businesses to ensure their employees continue to be paid no matter what adverse events the future brings.

Finding out what resources and business continuity plans a payroll outsourcing provider has in place should a disaster occur provides you with the knowledge that your business is safeguarded in the future, putting your mind at ease. It can also prove useful to learn what your responsibilities are in the disaster recovery process, allowing you to be completely prepared if the time comes.

What are the response times to customer enquiries?

One of the most important aspects of the relationship between a company and the bureau that processes its payroll is how enquiries are handled. No matter which outsourcing provider you choose, enquiries relating to your payroll will inevitably arise that you will need answered in a prompt fashion. 

Discovering how these queries will be dealt with and defining a clear understanding of service levels and response times with a provider will help to ensure that you aren’t left in the dark wondering what is happening with your enquiries.  It can also be a wise decision to find out exactly who will be responsible for fielding questions relating to your payroll. Is it the actual person processing your payroll or is a call centre approach used to field all questions? Many businesses often prefer a more personalised approach so identifying this can have a large bearing on their final decision.

Happy National Payroll Week!

Sage MicrOpay would like thank all of the hard working payroll professionals out there and wish them an enjoyable week.

There is so much more to payroll that meets the eye, it is a highly regulated and complex business process that often goes unrecognised. National Payroll Week is a time where we can all acknowledge the year-round hard work of our payroll professionals.

After all, without them we would not get paid!

One of the most important goals for any business, no matter which industry they reside in, is the constant pursuit of peak efficiency in their operations. This extends to all facets of the company, including the critical payroll and HR functions. Modern payroll software solutions offer a number of features that enable organisations to realise their goal of greater efficiency via streamlined payroll and HR processes.

Below are a number of benefits that these features bring, along with an explanation of how they boost the effectiveness of payroll and HR departments.

Automated payroll calculations

Regardless of how many employees a business currently possesses, the crucial responsibility of accurately calculating and distributing each staff members’ pay every pay cycle is a challenge. To ensure mistakes are not made, all pay components must be carefully included and tallied when required, representing a time-consuming task for all involved.

Luckily, today’s payroll software solutions possess the ability to automate calculations for payroll including back pays, termination payments, leave management and taxation, easing the burden on payroll managers. Various additions and deductions can usually also be created to include popular allowances that are frequently applied such as travel, meals and mobile phones.

Simplified superannuation payments

The calculation and payment of superannuation including concessional contributions such as the Superannuation Guarantee, salary sacrifices and voluntary employer amounts as well as non-concessional contributions including personal and spouse contributions can often be a challenge. Add to this the need to determine each employee’s eligibility for super contributions, plus the task of correctly paying the precise amount into each individual’s chosen fund at the appropriate time, and completing superannuation payments each pay cycle turns into a time-consuming process.

Payroll software can alleviate both the risk of error, and the difficulty associated with accurately handling superannuation. Calculations to establish contribution amounts as well as Superannuation Guarantee eligibility can be completed automatically. Software solutions also enable the remittance of superannuation contributions using EFT to participating funds that can be attached to each employee. Additionally some payroll software systems offer access to a superannuation clearing house service allowing much easier distribution of information and contributions to employees’ chosen super funds.

Human resources functionality

The effective management of staff is one of the most important aspects of operating a successful business. Not only does the proper utilisation of human capital promote increased productivity, it also facilitates numerous other benefits to an organisation.

Many modern payroll software solutions boast generous human resources functionality to assist businesses in achieving improved workforce effectiveness and talent management. Detailed employee records can be easily maintained with information on an individual’s medical details, probationary period, skills and competencies. Tools are often included to track accidents and incidents as well as rehabilitation to make the daily management of Work Health & Safety (WH&S) issues simpler. Training management functions can enable the effective development of staff skills by allowing the capture of comprehensive information including course providers, venues, cost per head and training manuals. Recruitment facilities allow the critical process of locating and acquiring talent to be completed more efficiently by tracking vacant positions, applicants, interview processes and promotion to employees.

Abundant reporting options for effective analysis

The ability to generate reports and detect adverse trends by analysing payroll data is important for all companies searching for a higher level of efficiency. Unfortunately the exercise of producing these reports, especially custom-made versions containing specific data, can be time-consuming.   

Assistance is now available with the comprehensive reporting and analysis options that are now commonplace among payroll software solutions. Normally offering a suite of standard reports, most payroll software programs also include numerous other options allowing users to quickly generate different reports upon request. Some systems also cater for a business’s need to build specific reports for their requirements by allowing the creation of custom-made reports from scratch, providing unlimited flexibility for reporting and analysis.  

With Australia’s talent shortage on the mind of most HR and Line Managers today, it is no wonder that employers feel pressure when trying to fill key positions. As such a cost driven exercise often compounded by time constraints, the recruitment process can be rushed and employers can be too focused on technical qualifications and years of experience.

The cost of a poor hiring decision can be so much more than just the salary. It is critical not to overlook key factors such as cultural fit with the team and organisation. A candidate who is a good fit for the organisation and has the potential to excel in a role with some investment in training, is a smart move in today’s employment market and builds loyalty.

A poor hiring decision such as hiring for skills and years of experience alone, at the expense of company fit, can have far reaching effects on damage to culture, morale, productivity and profits, not to mention the hard costs of salary, on-costs, training and induction, recruitment fees and advertising. Loss of revenue and the manager’s down time can mean that a poor hiring decision can cost 3 times the individual’s salary.

To choose the right person for the job, candidate interview practices must comprehensively assess both the eligibility and sustainability of the candidates being considered for a role. The candidate’s eligibility is a match between the role and the candidate’s education, work experience, practical skills and their overall aptitude. A candidate is sustainable if their attitude, motivation, interpersonal skills, task preferences, interests and work environment preferences reflect that of the company.

There are jobs where there will be more emphasis placed on one assessment more than the other, for example it would be more important for a computer programmer to have the eligibility rather than the sustainability, compared to an entry level position such as an office assistant where the emphasis would be on the company fit. Regardless of this, both eligibility and sustainability should be taken into consideration to ensure the right person is selected for the role. 

Now is the time to ensure that your interview and assessment practices are geared towards achieving positive hiring outcomes. 

As a result of new advances in technology including the rapid rise in popularity of devices such as smartphones and tablets along with powerful wireless internet connections, more and more businesses are implementing employee self service solutions with their payroll software to enhance productivity.

To shed some light on why this is the case and to introduce you to how these systems are revolutionising the way payroll departments function, included below are a few of the advantages that ESS solutions are bringing to companies.

Reduce the administrative workload.

Employee self service solutions give staff the ability to view and amend their information including personal, contact and bank details. By transferring the responsibility of maintaining accurate records of these details from payroll personnel to each individual staff member, employee self service portals can successfully reduce the severe administrative burden that many payroll professionals face every day. The process of leveraging a business’s entire workforce to maintain staff records by giving employees the control to change their own information also often facilitates a higher level of accuracy.

Email coordination of leave applications and approvals.

Quick, easy application and approval of leave is made possible with the use of ESS systems. Employees are able to forecast leave amounts and submit applications online anytime, anywhere, triggering the sending of automatic email alerts to managers for approval. The mobility and convenience this provides to staff, as well as the expedited application/approval process that occurs as a result of the automated workflows that ESS software possess promotes a more engaged workforce. Once again, administrative duties are also kept to a minimum with details of approved leave being imported directly into payroll software for the next pay cycle when using integrated systems.

Minimise paper-based processes.

The benefits of replacing numerous paper-based processes such as leave applications as well as payslips with online substitutes using employee self service solutions are numerous. Time-consuming data entry by payroll and HR staff is no longer required. The occurrence of common errors such as lost application slips or incomplete contact details forms become a thing of the past. The allowance of employees to view and print their pay advices also dispels any need for staff requests for pay information or copies of previous payslips.  Additionally, another obvious advantage of switching to paperless methods is the consequent positive effect on a business’s carbon footprint.

Enhance the mobility of your workforce.

Many businesses often rely on broad networks of employees across multiple locations to successfully carry out their operations. This scenario is often accompanied by its own unique set of challenges, none more prevalent than the need to efficiently gather data such as start and finish times to accurately process the payroll. The integration of an employee self service solution featuring mobile timesheet entry capability with a payroll software system greatly simplifies this conundrum. Giving staff the ability to input their own timesheet data online, coupled with the widespread use of smartphones and tablets with internet capability, means critical timesheet information can be compiled quickly from several different sites.

In today’s competitive business environment, companies are continually searching for cost-effective ways to streamline their processes and become more efficient. This trend extends to the payroll function, where there are many different options available to ensure this critical part of every business is completed effectively. Whilst numerous organisations prefer to process their payroll on-premise with their own computer infrastructure and software, many businesses find that choosing to outsource their payroll is the most prudent course of action. Why is this so? The following explains the many benefits of having your payroll processed by an external party and why this option could be the most beneficial for your organisation too.

Complex IT infrastructure not required

Payroll software solutions can often be large complex programs, frequently connecting to multiple databases and accessed by numerous simultaneous users. One of the pre-requisites to effectively implement and operate these programs on your premises is the presence of the appropriate IT infrastructure including hardware, software and networking capabilities. Additionally these systems also need to be upgraded and maintained over time to ensure they fulfil the requirements of the latest software updates.

Businesses that prefer to outsource their payroll function do not need to possess their own payroll software solution. As a result, these organisations can avoid the significant costs involved with maintaining a complex IT infrastructure for their payroll systems.   

No need for dedicated payroll staff

One of the major advantages of electing to outsource your company’s payroll processing is the resulting reduction in the need to employ specialist payroll staff. The process of recruiting, employing and retaining highly trained payroll professionals to complete your payroll obligations on-site is often a time-consuming and expensive ongoing operation. Careful consideration must be applied to ensure that applicants with the appropriate skills and experience are firstly identified, attracted and successfully hired.

Outsourcing your payroll to an external organisation negates the need for capital outlay on recruitment processes and labour costs, representing a large financial saving.

Remain compliant

One of the most important duties for any business that processes its own payroll is the job of keeping up with the latest payroll legislation to ensure they remain safe and compliant. Unfortunately, Australia’s extremely complex taxation system means completing this exercise successfully can often be a challenge.

By outsourcing your payroll to a professional bureau, the risk of non-compliance is transferred, meaning you no longer have to constantly ensure your payroll processes abide by the current regulations. Organisations that specialise in processing payroll for external parties are also much better equipped to ensure continued compliance by employing experienced payroll professionals and implementing the latest software updates to their software systems.

Access to data recovery and backup measures

Having constant access to your payroll data is critical to the continued success of your business. The implementation of disaster recovery and backup measures to keep your data safe should something unforeseen happen to your premises is another cost that all businesses must face if they choose to process their payroll in-house.

Due to the large amount of sensitive information they handle every day, payroll outsourcing operations have extensive data recovery and backup contingency plans in place in the event of disaster. This means that your payroll data is conveniently protected as a part of the outsourcing service you choose, giving you peace of mind that your employee information is safe.

No large capital outlay

The purchase and implementation of the requisite IT infrastructure plus the appropriate payroll software solution to process your payroll in-house often involves large upfront costs. For businesses with tight cash flows, this capital outlay can represent quite a large obstacle.

Organisations are able to avoid this situation by taking advantage of the monthly payment options and low implementation fees that numerous payroll outsourcing bureaus offer. Plans can also be tailored depending upon your needs such as the amount of reporting, or the number of data changes needed each pay period meaning you only pay for the services you require.

No training costs

Organisations that employ full-time payroll professionals to process their payroll on-premise enjoy many benefits including direct access to their payroll data and the ability to immediately produce any required reports. A drawback of this approach however is the need to ensure that these employees are properly trained in the latest payroll software solutions as well as current government regulations.

Businesses that rely on a payroll outsourcing service to process their payroll do not need to employ full-time specialists or arrange regular training sessions. Instead this duty is left to outsourcing providers, resulting in these companies avoiding a number of training costs.

Australia’s taxation system, due to the numerous legislative requirements that accompany it, is one of the most complex in the world. To ensure compliance, all businesses must keep abreast of the latest adjustments to laws that affect payroll and taxation.

Fortunately, help is at hand. There are many, freely available sources of information that can assist your payroll and HR staff in staying well informed and prepared when changes do occur.  

Choose a payroll software provider that supplies software updates when legislative changes occur.

Ideally, your payroll software solution provider should make the task of staying legislatively compliant much easier by providing regular, timely software updates when changes are made to laws that impact the payroll process. This is particularly important prior to the start of the new financial year when new regulations such as changes to tax rates, introduction or cessation of levies and adjustments to Modern Awards generally come into effect.

Software updates should be accompanied by release notes which provide an overview of the changes included in the update. These overviews are invaluable as they usually summarise not only the changes to your software but also the legislative changes addressed by the software update. Release notes are an excellent resource that payroll professionals can utilise to stay informed of changes.

Attend payroll seminars covering the latest payroll legislation.

Payroll seminars and industry conferences offer a great opportunity for payroll professionals to enhance their knowledge. Seminars may be focused on a specific area such as payroll procedure, legislative changes, or a combination of several topics. Regardless, these seminars are dedicated to educating payroll personnel on the latest regulatory changes, future directions, industry trends and other issues that have an impact on payroll processing.  Sessions are presented by experts in their field, giving your payroll staff the chance to gain valuable insight.

Attending seminars focused specifically on payroll legislation, particularly new or changed legislation, is an excellent way for your payroll staff to gain an understanding of the latest regulatory changes.

These seminars are presented by a number of organisations, including Sage MicrOpay. Not only do they provide your payroll personnel with the opportunity for development, they also allow your staff to meet, build relationships and exchange ideas with other professionals in the payroll industry.

Visit the Australian Taxation Office website.

The Australian Taxation Office (ATO) provides a wealth of easily accessible reference information that can help you stay informed about current taxation legislation. All of this information is freely available from the ATO website, www.ato.gov.au. From here, you can access many different, regularly updated resources, such as:

• The ATO legal database, which contains legal and policy information.

• Information about what to do if you make a mistake.

• Tax calculators and other tools; and

• Downloadable versions of ATO guides and forms.

Additionally, the ATO website features a great deal of useful information on topics of interest to payroll professionals, such as:

• Record keeping requirements

• Superannuation obligations for employers

• Fringe benefits tax

and much, much more.

The ATO issue regular updates plus provide the option to subscribe to these updates either by email or RSS feed, ensuring you have the most recent information. The ATO also offers a range of free learning resources, including webinars, seminars and workshops.  

Join a payroll association.

Typically, one of the most important ways that a professional association supports its members is by making sure they are well informed. Membership of a payroll association allows payroll professionals access to a wide range of payroll-focused resources, for example, email newsletters or articles. To join, associations generally charge an annual fee but members then have full access to a wide range of useful material. Information about current legislation and compliance issues, as well as access to tools including calculators, checklists, best practice guides and whitepapers are just some of the benefits that can be conferred by membership.

Payroll associations regularly host educational conferences and industry events as well as offer training courses. The topics covered at conferences or in training are researched and targeted to the needs of payroll professionals in order to assist them in staying up to date with payroll legislation, process and technology. They also provide an excellent opportunity to learn from respected experts in the payroll industry and gain valuable insight on the latest reforms.

Visit your state revenue office website.

For information about payroll tax, a visit to your state revenue office’s website is a worthwhile exercise. In addition to useful resources like payroll tax calculators and current threshold figures, you can also access details of current payroll tax legislation and amendments. Similar to the ATO, most state revenue bodies offer free education resources, such as online learning, webinars and seminars.

Find out how Sage MicrOpay can help you stay up to date with payroll legislation.

For further information on Sage MicrOpay’s software solutions and services, including our payroll legislation seminar series, please visit our website or contact us on:

1300 729 229
enquiries@micropay.com.au
www.sagemicropay.com.au

Recently, the Fair Work Amendment Bill 2012 was officially passed by the Australian Senate and now awaits royal assent when it will formally be made a law. The Bill includes a number of amendments to the Fair Work Act 2009, many of them technical, recommended by the independent Fair Work Act Review along with numerous other stakeholders.

Many of these changes may have implications to the way your business operates. They include –

Fair Work Commission
Fair Work Australia will now be renamed to the Fair Work Commission and two new additional Vice President positions will be created.

Unfair Dismissal
Time limits for lodging certain claims will be altered to a uniform timeframe of 21 days. This includes the extension of the timeframe for unfair dismissal claims up from 14 days and the reduction in the timeframe for general protection claims down from 60 days.

The Fair Work Commission will be provided with increased powers to not only dismiss applications in certain circumstances, but to also award costs against parties where an unreasonable act or omission during an unfair dismissal matter has incurred costs to another.

Default Superannuation Arrangements
Outlined by the Productivity Commission’s inquiry, a new process will be implemented for the Fair Work Commission to assess applications from funds that wish to have generic MySuper products included as default funds in modern awards.

Enterprise Agreements
The Fair Work Act Amendment Bill will result in opt-out clauses in enterprise agreements no longer being permitted. It will also prohibit statutory enterprise agreements with a single employee.

There are also a number of other technical and clarifying recommendations made by the Fair Work Act Review affecting a range of procedures including scope order applications, modern award variation applications and protected action ballots that will be implemented in the Bill.

More information on the changes included in the Fair Work Act Amendment Bill can be found here.

Sage MicrOpay are excited to announce that we have just opened a brand new office and training facility in the heart of Brisbane at West End. These new premises will help us to provide businesses based in Queensland with a premium level of service and support.

Our office address is located at:

Level 1, West End Corporate Park
20 Pidgeon Close
West End, QLD 4101

As a result of our new Brisbane premises we are now also pleased to offer comprehensive payroll training courses to payroll professionals in Queensland who wish to enhance their payroll software skills or stay informed on the latest payroll legislation changes.  Delivered by experienced trainers and industry experts in the comfort of state of the art training rooms, these courses provide an ideal learning environment and help to ensure that you stay compliant and get the most out of your payroll software solution.

For further information about our Brisbane training courses visit our website at www.sagemicropay.com.au/training or contact us on 1300 729 229.