The Access Group Australia's Stephen Duncan shares his solutions for the six most common payroll challenges
This article was produced in partnership with The Access Group Australia.
Melanie Hearse of HRD Australia caught up with Stephen Duncan of The Access Group Australia on how to overcome payroll challenges.
With 2.4 million businesses employing 13 million people Australia-wide, there’s no shortage of pay runs being processed every month. As you can imagine, a complex beast like payroll comes with its own set of challenges. As technology evolves, these can be more easily managed.
“Overcoming what we call the payroll challenge requires payroll teams to successfully manage six interconnected dependencies – ensuring compliance, satisfying pay conditions, maintaining security, integrate multiple interconnected systems, and managing various business structures,” Duncan says.
Challenge 1: Delivering a rich employee experience
Paper based and manual processes are not only out of step with employee expectations, Duncan says they’re prone to error and delays. It also detracts from staff desire for a flexible, autonomous workplace experience.
“The COVID-19 pandemic has seen employees increasingly demanding more workplace flexibility and autonomy. Our research shows over half of Australian organisations say its important employees are given choices for when and where they work and a similar number think they should have influence over the resources needed to do their job,” says Duncan.
This can be achieved through software offering secure and easy- to-use self-service options for staff which allows them to manage the ‘admin’ side of their job.
Challenge 2: Managing a flexible business structure
Today’s business needs to cater to diverse pay conditions, nuances within award conditions, enterprise agreements and even external contractors.
From the business perspective, many now have multiple ABN entities under the one umbrella. In fact, Duncan says 60 percent of the 2.4 million Australian businesses are likely multi-entity in structure.
These more complex set ups require payroll teams to provide accurate reports and compliant payments to the ATO from each of their separate entities.
Automated systems can help. As well as dealing with repetitive tasks, the right software does away with manually processing pay runs, STP reporting, Super Funds, and General Ledger feeds into finance systems.
Challenge 3: Managing interconnected payroll systems
Effectively processing payroll requires integrating data from any third-party productivity applications impacting payroll calculations, then processing and managing pay-runs and generating outputs including EFT and Single Touch Payroll (ATO) and financial reports.
Legacy software doesn’t ‘talk’ to third party systems – think time & attendance, business intelligence, HR, or workforce applications. This means duplicated data and difficulty in payroll reporting.
The right software not only streamlines these processes, but it can also provide hierarchical reporting and give a consolidated view of payroll data across all a company’s entities, Duncan says.
Challenge 4: Ensuring payroll trust and compliance
A whopping 90 percent of Australian payroll managers said they find interpreting legislation or awards around employee entitlements and payments either confusing or contradictory.
“There are new regulatory requirements introduced every year. Some are mandated by Annual Salary Agreements, some superannuation changes and as of 2022, from Single Touch Payroll Phase 2. Staying on top of these requirements is vital - non-compliance can result in significant fines, reputational damage, decreased employee morale, and in some states, even criminal penalties for individuals,” he says.
The solution? A payroll software provider with in-depth knowledge and experience to ensure compliance. See the list of the best payroll software here.
Challenge 5: Maintaining business continuity
Duncan notes companies are increasingly cognisant they need to ensure a smooth payroll operation when the unforeseen happens – for example extended leave of key staff or changes within the business or the wider business landscape. Not to mention payroll professionals are in high demand and replacing them could take longer than average.
“It’s critical that your payroll provider offers outsourcing and recruitment services that you can rely upon if you lose mission critical payroll personnel.”
Challenge 6: Gaining rich employee visibility
As a business grows, Duncan says so too does the responsibilities and expectations on your payroll systems. They work beyond simply what someone is paid in the now, but ideally provides tracking of the employee lifecycle, from hire to retire, for a diverse range of conditions.
“Legacy systems often cannot provide this rich data, and for a business with a multi-entity structure, gaining employee visibility is even more challenging. Usually lacking quick and easy access to employee data, making it difficult for payroll teams to resolve issues in a timely manner,” Duncan says.
Ensuring an accurate, compliant, and timely pay run each pay cycle requires businesses and their payroll team to successfully manage these six interconnected payroll challenges. Every business is unique, and Duncan urges companies to regularly review and analyse if their payroll software allows for effective management of these challenges.
To find out how you can overcome the payroll challenge and ensure a smooth, compliant and secure pay-run each and every cycle, download The Access Group Australia’s E-Book.
Stephen Duncan
As Product Marketing Manager for Access People & Payroll, Stephen draws on over 25 years in the software industry specifically in HRIS & ERP to help Australian businesses simplify their HR, payroll & operations with innovative technology.
Stephen has a proven track record in demystifying technology as an enabler to break down organisational barriers
