Common Payroll Issues Plaguing Security Companies
Payroll processes that just take way too much time and energy to manage slow a business down. Not only are they unproductive but they’re also frustrating for administrators and prone to potential user-driven errors.
Whenever I speak to folks dealing in the back-office operations – employee scheduling, time and labor management, billing, and payroll – the number one issue for them is payroll. Getting the right information, checking and double-checking the payroll, fixing errors, and trying to get it out the door every week is a major challenge. Let’s talk about some of the more common payroll inefficiencies and how to prevent them with a payroll management system.
Manually Processing Payroll and Hand Keying Time Sheets
Is there anything worse than getting time sheets and having to go through each one, transferring the time worked into a pay rate? Even if you have systems for time collection, without a connection to your payroll management system, you are moving information manually. Added to the time it takes to key in the time sheets to the payroll is the additional deductions for taxes, benefits, etc, and modifications for overtime rates and other adjustments. These are all time-consuming, prone to error, and can lead to inaccurate payroll.
Solution: Implementing a payroll management system that takes time and attendance information, automatically cross-references that information with the employee pay rates, deductions and tax rates, and calculates the payroll in one batch process. You also want to look for a solution that flag any exceptions, such as zero hours, employees below minimum wage, and any other anomalies. This way you are only double-checking a handful, and not the whole batch.
Manually Onboarding Employees – Double Entry of i9 and W4 Data
Human Resources works very hard to post jobs, recruit new employees and build engaging onboarding programs for these eager, new recruit only to hand you more forms to key into the payroll system. Entering all the i9 form (eligibility to work) and W4 form (withholding income) from the form to the system takes time. Sometimes it’s digital, most of the time it’s paper; yet, all of the time it’s taking time away from productivity.
Solution: Integrating these forms into the employee payroll management system will help. More and more HR management systems are processing these onboarding files electronically – and you want you payroll management system to follow along. Look for a system that will automatically update employee records in payroll from their HR Management System, or better yet, find one that does it all!
Constant Updates to Employee Records Across Departments
This one relates to the second one in that the employee records usually are where all the information lives. Yet, there always seem to be several places where they “actually” live. HR has an employee file, the schedulers have employee records for scheduling, payroll has employee records with pay information, and somehow they all need to say the same thing. This leaves a discrepancy on pay rates on employee records, withholding information, other deductions, and looking in multiple employee files to get an accurate source of the truth.
Solution: A single employee record synced with all the correct data helps to alleviate this. Whether you have multiple systems in place for HR, Time and Labor Management and payroll management, or one system – you want this information integrated and synced. Having a “single source” of the truth eliminates confusion, saves time in looking up employee information, and reduces errors due to disparate data.
Manually Flagging Payroll for Wage and Labor Violations
This is one of the worst parts of running a payroll manually and certainly takes up valuable time. Every time you run a payroll, you run the risk of having information that puts you at risk for compliance violations. For example, paying an employee below minimum wage, failing to pay the proper overtime rate, calculating the wrong taxes, or simply not paying them what they earned. It’s usually not malicious; it’s just prone to error when you try to do it manually every pay period. And, wage and labor violations carry any number of penalties, files, litigation – it not to manually review the payroll – failing to catch opens the door to unnecessary noncompliance and other issues!
Solution: Using a payroll management system that provides exception-based payroll reports will help. The benefit here is that with an exception-based report, you can flag all the compliance violation rule – minimum wage, tax rates, etc. – and have the system cross-reference them against the current payroll. The system is doing the checking – and double-checking – for you and returns a report of just the anomalies (exceptions) that you need to address. This take out a lot of time-consuming and potentially risky compliance efforts and simplifies it.
Employees Inquiry About Pay Statements
Inevitably, payroll managers tend to get phone calls directly after a payday with common questions and inquiries on their pay. “I worked more hours than this” – “My pay rate is wrong” – “I worked overtime here” – “This doesn’t look right”. Every inquiry takes time to review employee concerns as payroll managers must go through each employees pay statement, check the time sheet, verify the pay rates, ensure everything is correct, and provide them a record of their pay. Usually it’s correct, but it’s time consuming to handle each and every employee inquiry.
Solution: Having detailed pay statements accessible by the employee every pay period will improve employer-employee communication and create transparency. This is probably one of the best services a payroll management system can offer – and that’s giving the employee visibility into how their pay was calculate for that period.
Creating More Efficient Payroll Processes
If you are following all the processes above, connecting time and labor management to payroll management will help flag for exceptions, ensuring proper compliance and deductions according to the employee record, display all of that information to the employee in an accurate and up-to date manner. Your workforce can then see their pay stub, complete with hours worked, locations worked, pay rates per location, withholding, deductions, and more. This eliminates the time taken to walk through all their pay as it’s explained and laid out right in front of them.
Eliminating the Main Issues Preventing Consistent and Timely Payroll
By having a payroll management system that builds in some of the automation that takes the most time out of your process, you are already winning they payroll game. Companies that have gone from manual to digital in their payroll management have reduce the processing time by over 50%. That’s more time that can be spend on value added activities and streamlining your business.
If you have any questions about payroll management for your workforce, feel free to contact us.
About the Author
Tim Lozier is the VP of Marketing for Valiant Solutions. He has an extensive background in software technology, and has been involved in the development of leading-edge technologies and strategies for workforce management solutions. Lozier is responsible for fostering the direction of and providing strategic leadership for Trackforce Valiant’s comprehensive platform for security workforce management, with uniquely tailored solutions for the front-line security workforce management and the back-office Time and Labor Management, Payroll Management and Human Resource Management.
View his articles
The Shift_cast Podcast With Tim Lozier, Host
Listen to the episodes
COVID-19 Response for Contract Security: Q&A Session with Security Industry Experts