Payroll, by the Push of a Button

And on payday, no calls from the employee base for a corrected checks! WOW wouldn't that make payroll easy! This technology exists but the legislation is not quiet there yet. How close are we to a paperless payroll? Let's see.

Not a Myth or Fantasy
Payroll information can be paperless today, thanks to technology. Recruiting systems enable applicants to apply online, and the information they enter automatically populates their employee records upon hire. The employees are the experts and enter their own data, ensuring the data entered is correct -- at the source by the source! Employees can enter their own address, W-4 (this is one place legislation is not quite there yet, not all states are accepting online entry), time entry, and direct deposit information.

Deposits can be made to bank accounts in any country in any currency, investment funds, or cash cards; the choice belongs to the employee. Soon employees will push a button on their online payslip and have the data download into their personal finance systems. At year-end, thanks to recent legislation, employees can receive their W-2 online and with a push of a button complete their 1040 e-filing. Current technology provides full-cycle, paperless, 360-degree employee processing.

These are benefits you can provide to your employees make their lives easier. and yours, too.

For the employer, there are also many exciting things happening.

Hurry up and Wait
Historically, the payroll manager gathers time, massages data, and rushes to process the payroll in the last few days of the pay period. Then as the payroll manager finishes one cycle, distributes checks, the calls start for corrections…. then more corrections… and the fun starts all over again.

Today, you can run your payroll at the beginning of the cycle, for instance you can process all salary employees at the beginning of the cycle. This allows you to pick up any changes to the employees record and reprocess only those employees with changes -- along with your timecard employee base -- at the end of the cycle. This type of payroll process management allows for reduced processing time at the end of the cycle. You can spread the load during normally hectic processing times. You no longer need to have someone monitor your payroll runs overnight and submit successive jobs to complete the payroll run.

You can string together the applicable payroll processes with checkpoints after each process to look for any exceptions based own your own policies, and then automatically page the appropriate party when run time, business policy violations, or other unacceptable limits are exceeded. Such a technology-based payroll system checks that an entry is retro active and performs the appropriate retroactive calculations; it recognizes that a W-4 filed exceeds the federal/state exemption limits and is automatically selected for filing with the government.

With employees and managers performing self-service transactions, payroll managers no longer need to audit changes in the same manner as before ; you can rely on technology to perform the checks and actions that used to be done by people.

These are just a few examples of what is being done today by software system to fully automate the payroll process.

However, E-business software alone is not enough for today's payroll professionals. Information is available from many sources to assist today's Payroll and Payroll Tax Professionals. Collaboration with payroll research vendors can provide instant, detailed knowledge at the touch of a button from within some payroll applications.

For example, let's say your company merged with another company, any you now have employees in another state. While in the application and setting up the system for multi-state filing you can go online and do your tax research! With the click of a button, you find the rules for that state, for tax processing… Questions that would previously send you to books to research can be answered while in the software package through the use of technology and payroll research vendors.

The Portal: Great Communication Tool for Payroll and HR
Portals deliver data to those who need it, when they need it! A 'Portal' is a single web site location focused on a specific topic or area. Sometimes Portals are configurable to a specific user, like a My Yahoo page. A Payroll Portal is like a bulletin board of sorts, where employees can go to find out Payroll-related information or Payroll Managers can go to run analysis reports.

A payroll portal provides instant views of how the payroll processes are processing as they run. Legislative compliance is always an issue with payroll; a portal advises you of system compliance with known legislative changes. A payroll portal gives analytic reports of payroll variations from period to period and identifies exceptions. This daily business information enables decision makers to make smarter decisions.

Annually you publish a payroll calendar for your employees via a newsletter; the newsletter -- if it is read -- is usually lost or recycled. Using a portal, you could publish the payroll calendar and have it available to the employees throughout the year. You can publish items such as payroll department policies and handbooks online and employees access them via employee portals.


The Importance of Open Standards
'Open Standards' is a designation that something is designed to a given set of known standards, and hence it will work interoperably on different products by different vendors.

Vendors who develop products using open standards create systems that will not become outdated. Using XML (eXtensible Markup Language), information can be made available to employees and employers through a variety of ways - paper, email, on the web, even on cell phones and PDAs! The advantage of using XML (an open-standard technology) is that it makes the data available in a variety of different formats that can be delivered in a variety of different distribution channels.


The HR-XML consortium is a collection of vendors and employers jointly developing XML standards for integrating data between third party systems. Recruiting and time standards have already been developed with more coming.

The COTS SPEF (Commercial Off The Shelf Single Point Electronic Filing) initiative is a group of vendors, states and government agencies working to reduce employer burden by simplifying the process for the quarterly filing of state and federal tax and wage reports and making associated payments. COTS SPEF provides guidelines and standards for the development of software for the electronic transmission of a uniform record that satisfies the employers' state and federal obligations. The group is projecting in 2003 having 941 XML filing available.

Oracle is a charter member of both the HR-XML consortium and the COTS SPEF initiative.

Summary
Technology provides a truly paperless, 360-degree employee processing. Employers are using technology to change payroll paradigms, provide 'push of a button' pay runs. Providing knowledge within the payroll software is another bonus for payroll professionals. Portals provide daily business information to decision makers enabling more effective and efficient decision-making. Standardization among vendors and governments is becoming more wide spread and easing the burden by simplifying processes.

With legislation becoming more 'technology friendly' and collaborations pushing for even more legislation to move in this direction, payroll professionals are working in a different world today then we did even as little as 3 years ago. As a Payroll professional today, I can certainly say that technology is now working to serve me, verses me working to serve the IT system… What a change for the better, from the employees maintaining their own data, to communication tools such as portals, and legislative governing bodies working together as a team for standardization, there has never been a better time for us to be Payroll Professionals!