This week, we're excited to have some of the Avanti team attending The One National Conference presented by the Chartered Professional Accountants of Canada. So we thought it was a good week to talk about what CFOs, Finance Directors, and Accounts Payable people should know about Payroll.
CFOs, finance, and accounting professionals are responsible for helping their organizations make well-informed decisions. With Payroll being a significant, and often the largest, operating expense for an organization it is important to have a solution that provides the greatest return on your technology investment.
The first thing to understand is that payroll is one of many elements to taking care of your employees – Human Resources, Time & Attendance and Self-Service are also key components so payroll works best when it is integrated within a full HCM/HRIS suite so that all of your employee management can be done from one single data source.
What is HCM?
Human Capital Management software (HCM) consists of Payroll, Time & Attendance, Human Resources and Self-Service. It is a strategic approach to the management of your most valued assets – the people working there. Watch this webinar on HCM for Finance for even more insight.
Here are 3 questions that this post will help you assess:
- Is your company realizing all the cost saving advantages of your Payroll solution?
- Are you getting the most valuable data for decision making purposes from your Payroll solution?
- Do you have the right tools for your team to manage your employees?
5 Key Items that Determine the ROI of Your Payroll Solution
1. Accurate Payroll processing saves precious time & resources for your organization
Accurate payrolls are essential for employee confidence in your organization and for ensuring you do not end up with costly penalties or overages for not calculating remittances or other items like benefits correctly.
Take Control
You can expect your Payroll solution to calculate regulatory remittances correctly and to provide you with all the information you need to pay them on time and accurately to ensure you never have a fine or penalty applied. When we implement new systems at Avanti, it is common for us to find that a legacy system is setup incorrectly for taxable benefits, CPP, and EI. When overpayments are made the employee can get their overpayment back, but your organization cannot get your corporate overpayment back, which can result in unnecessary costs.
Eliminate Oversights
You can have a solution that balances expenses even after terminations are processed. We’ve all heard stories of people who were no longer on the Payroll, but were still getting paid or that benefits have been significantly overpaid as there was no easy tool to reconcile them and verify the balance against the bill from the provider. Make sure your payroll solution can perform audits to ensure that you aren’t continuing to pay benefits for terminated employees.
According to a recent survey conducted by the Canadian Payroll Association, 50% of Canadians are living pay cheque to pay cheque. Canada's Payroll professionals are responsible for ensuring that $865 billion in annual wages and taxable benefits get paid to employees, accurately and on time.
2. Access to data for Business Intelligence purposes is essential
Our clients have often shared with us that when assessing value for their Payroll solution, it’s the reporting that provides the most value to them and their executive team.
Unlimited Access
You should expect your solution to make every field you are tracking available to you for building reports. And you should be able to build reports that incorporate the required information in a presentable manner.
Reporting Made Easy
Anyone on your team should be able to produce reports without a third party tool or needing to have extensive database knowledge. You should expect a Payroll reporting tool that empowers your team to provide data quickly and accurately. For example, an ad hoc reporting tool with drag and drop functionality can vastly improve efficiencies when building your reports. Everyone with access to the data should be able to run their own reports and they will not require IT resources for any reporting. You shouldn’t require your IT department to get you the Payroll reports you need.
Work Smarter, Not Harder
Your Payroll solution should be like having an extra team member. You should expect it to be able to automate alerts, schedule reports, and allow you to create workflows for process approvals.
3. In business, the only constant is change and your Payroll solution should meet your business needs today and well into the future
Your Payroll solution needs to be flexible so it can be configured to meet new business requirements. Whether your organization is changing benefits plans or experiencing significant growth your solution needs to be able to adapt as your business changes.
Stay Current
You can have a solution that is flexible and does not come with costly and cumbersome version upgrades every few years. You should be aware that there are solutions that change automatically as needs change in the marketplace and that keep you up to date both legislatively and in terms of technology.
Finding that Perfect Fit
You should expect your solution to fit your business, not for your business to have to fit the solution. Your solution should allow you to tame your spreadsheets and bring everything together in one database, eliminating the need to maintain data in many sources. Ask your software provider to review your setup and processes every few years so that you know you are getting the most from your solution. Once you have a solution in place, your relationship with the software provider doesn’t end - ask for their advice, guidance, and knowledge.
Your Entire Team Will Benefit
Your solution needs to allow your team to be proactive, not reactive. It needs to provide flexible tools for updating information for your employees quickly and easily. There should be flexibility in sharing information directly with managers and employees, allowing them to access the information they need at their fingertips through a Self-Service portal. These kinds of tools will enable your Payroll and HR team to free up time to produce more reports and focus on better serving their client base (your employees).
4. The annual cost of your Payroll solution should be transparent
You should know what the cost of your system is and be able to budget for it accordingly. With different pricing models (e.g. capital vs operating expenditures) and delivery methods (e.g. managed hosting services, on premise, or outsourced) it’s important to figure out the total cost of your Payroll solution.
Regardless of the model you select to better manage costs, insist on the following points from your Canadian Payroll solution provider:
Cost Containment
You can expect to pay a single, all-inclusive cost per year. It is not necessary to expect to pay for every pay run, every report, every pay statement, T4, and ROE.
Remember, It’s Your Money
Consider the cost of money over the course of just one year. Payroll often represents a significant portion of your organization’s dollars. Consider the effect this has on your cash flow and lost revenue from other areas. As an example, these funds could be working for you earning interest income or purchasing inventory.
You're Unique
Every business is unique, you can expect your software to manage complicated Payroll requirements without time consuming workarounds, additional implementation costs or programming fees.
5. When your HCM houses all of your employee data in one place, it should still be compatible with other relevant software solutions at your organization
Not only should you expect your HCM solution to be able to work with other software solutions, but it should also be compatible with your Payroll and HR team! Expect the workflow, technology and usability to be easily learned by your team and to require minimal training to maintain and manage your employees.
The Technology Matters
Having a single source that collects employee time, processes your Canadian Payroll, calculates deductions, uploads pay statements, and allows you to post your payroll GL with a single keystroke will allow your team to get back to what they do best – looking after your organization’s people.
Compatible = Efficient
When you have compatibility from your HCM with your financial solution, you can expect detailed costs for all of your Payroll accounting. For example, when an employee works in more than one cost centre, employer-paid benefits can automatically be expensed per the wages earned. So when you look at costs, it is truly a picture of exact costs for all wages, benefits and accrued expenses for vacation or other entitlements.
Usability
Is your Payroll software solution easy to use? Does the workflow make sense? Can end users easily access data from a single point in the software? When your team gets what they need from your payroll solution, they will be empowered to provide accurate, detailed pay and reporting. So when a solution is usable, it makes for an efficient team which means you won’t need to add a headcount to your Payroll or HR group. When your team is happy with the tools they have, you get awesome results.
In Summary
Taking stock of your current Payroll solution will help you see:
- If it is meeting the needs of your organization and,
- Where efficiencies can be gained.
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