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The IMPORTANCE of Solid Payroll Processes



Processes form the heart of any organisation and cover all aspects of the business. Unfortunately, Payroll processes often don’t get the attention they need to ensure Payroll runs smoothly and consistently.


As technical systems involved in Payroll become more and more advanced, poor processes outside of the technical systems are increasingly becoming the major source of issues. This is particularly true in cases of incorrect payment, as poor process can lead to incorrect data being fed to the technical system.


It needs to be remembered that technical systems don’t exist in a vacuum. The interactions between technical systems and the humans who interface with those systems are crucial to making sure things run smoothly, and this is where process comes in.


Having specific processes in place which are followed consistently can allow you to optimise the interactions between your employees and your technical systems. These processes will guide all employees in their interactions with the technical Payroll system to make sure all necessary data is collected completely and correctly.

What happens if, for example, a manager asks an employee to work through their lunch break because they’re understaffed? Generally small paid breaks, like morning and afternoon tea breaks aren’t always recorded into Time & Attendance systems. However, depending on hours worked, employees are entitled to an unpaid or paid lunch break (depending on Award or terms and conditions). What this means then is, if your processes don’t include checks that these breaks have been correctly taken, then your Time & Attendance and Payroll systems aren’t meeting best practice and possibly compliance.


The organisation must develop a culture embracing the importance of process to achieve consistent outcomes and Payroll compliance (amongst other things).

Everyone needs to understand that consistently following solid processes will ensure your systems have all the data they need to pay people correctly.


Not having up-to-date documented processes and/or not following those consistent processes is a substantial cause of bad Payroll outcomes. The focus should always be on fixing the processes that made it possible for an error to happen, rather than trying to fix specific issues in specific circumstances.


So how can you design processes to minimise risks in your Payroll outcomes?


First of all, it’s important to make sure everyone is focussing on compliance just as much as their other stated outcomes (like cost or simplicity). For a lot of people, meeting compliance requirements doesn’t feel as urgent or as important as operational targets. It can easily get left by the wayside.


Making sure your people, especially managers, are trained on maintaining workplace compliance, and have channels of communication for checking how they should respond to situations is crucial. This allows for high reporting standards to be maintained throughout your organisation, and for correct processes to be followed consistently, so things don’t go unreported and missed.


Along with this, any data in your systems that doesn’t have processes in place to ensure its accuracy also creates a risk. Once you’ve identified potential risks, you can work out how to mitigate them.

A lot of underpayments can be avoided by continuously checking and improving processes.

Businesses and regulations shift over time, and processes need to be updated and maintained. Making sure your teams are always checking on their processes and how they’re performing for your organisation means that when something starts to not work well, it will get fixed promptly.


When issues are noticed it can be tempting to simply find a simple solution that will fix that single case, however, this is just putting a band-aid on the issue. It’s always best to find the root cause of any issues that are noticed, to make sure it doesn’t cause other problems in the future.


Payroll can get incredibly complicated, especially for large companies. It’s essential to ensure you have solid Payroll processes in place, so everything runs consistently, efficiently and accurately. This way you can avoid incorrectly paying your people, and also avoid the massive downsides which can follow.


In the end, whole business Payroll systems (inclusive of people, process and technology) are critical in the running of any organisation, so making sure each component is working the best it can ensures the business is running on a solid foundation.



Businesses can email contact@agilexperts.com.au or call 1300 287 213 for free first-step advice on how to ensure your Payroll processes can safeguard your Payroll compliance. Follow us on LinkedIn or sign up here to receive our articles direct to your email inbox.

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