How to Keep Your Payroll Reports Clean and Data-Driven

Let’s face it, one of the most challenging and stressful things that a business owner faces when it comes to managing their workforce is taking on a payroll, time labor, benefits and HR system migration/implementation.

Workforce management implementations, if done correctly and by someone who is qualified, will streamline human capital processes, but if done incorrectly and by someone who is not qualified, can make an employer’s life a living hell.

Most small to midsize companies experience the latter because they do not have the experienced staff/team, with a broad project management skill set to handle these complex migrations. They also do not have clean, organized data readily at hand.

Here are four tips to help you identify the data, policies, and processes needed to ensure a smooth transition to your new system.

1. Establish your team, roles, timeline and budget. Identify your internal and/or external resources that are going to be called upon to help with the implementation. Don’t go at it alone. Ideally, your team consists of a project manager, one who takes accountability for the project and who is comfortable in all aspects of payroll, time labor, benefits and HRIS. Your payroll team leader needs to be well-versed in your current payroll system and will be responsible for providing clean, accurate employer and employee payroll data, as well as the company’s chart of accounts (you may have to leverage your external bookkeeper and/or CPA).

Next, your time labor team member is someone who possesses a technical skill-set and is often your resident IT employee, who understands systems, schedules, operational workflows and who is able to test the data integrity. This is most likely the person who you already rely on to manage the time sheets, job costing and labor distribution excel file.

Finally, your HR team member handling the human resource role is usually the hardest role to fill, especially if you are a small to midsize company that generally cannot afford a full-time HR generalist. If you are fortunate to find a skilled HR generalist, they should be familiar with the entire employee life cycle from recruiting, hiring and onboarding to performance reviews, benefits administration and compliance.

As for your implementation timeline, plan on at least 1 to 1 1/2 weeks per module. Most providers will tell you no less than six weeks and as long as 12 weeks. When you take into account training and as for the implementation fee, budget at least $35 to $50 per employee. Some companies will negotiate in competitive situations and/or allow you to roll the fee into your per payroll or monthly cost. The cleaner your data and the more talented/experienced your team, the better. When you are negotiating the implementation fee, if you are doing all the heavy lifting and bringing clean information to the table then that will save you significant time and money, especially with the setup fee.

2. Scrub your payroll data. Since the most important module is payroll, you want to make sure there aren’t any delays in paying your employees and the key here is to make sure you are entering clean data — information that has been pulled out of the current payroll system and has been scrubbed for accuracy. Just because your prior payroll company handled your implementation does not mean all of your employees were originally loaded with the correct withholding, earnings and deduction codes. PaycheckCity.com provides a great calculator to audit your employee’s pay and ensure that you have them set up correctly
3. Time labor management policies and processes. Capturing and accruing employees’ work hours, paid time off, sick days and vacations is one of the biggest time wasters for small to midsize companies, especially if done manually. We see many companies who try to manage time through Excel, paper timesheets and/or time clocks that are not integrated with payroll. The complexity of your company and nature of your business will determine the type of time labor system that can handle your individual situation. This is why having organized documentation of your time entry methods, employee schedules, job costing, labor distribution, supervisory roles/approvals, accrual and PTO policy, an employee handbook, lunchbreak policies and locations/job sites are just some of the crucial data needed to ensure a smooth time labor implementation.
4. Building out your human capital management module. This should be last in line and will require data, policies and processes to be created as you build and customize your system. Most organizations use this as a time to clean up, overhaul and/or create such things as their organizational chart, HR organizational reports and job descriptions as well as recruiting, hiring and performances practices. If you have this documentation already, you are way ahead of the game.

An important area to focus on is the process(es) of recruiting, hiring and onboarding the new employee. The sooner you can capture the employee’s information, within your workforce management platform (without entering it yourself) during the recruiting or hiring process, the more efficient the onboarding process will be for the employee and the cleaner the data will be.

Most importantly, you should remove as much paper from the process as possible. The system can then perform for you and get the data over to who needs it — payroll, benefits administration, the insurance carrier/broker, workers’ compensation and the 401(k) TPA/recordkeeper/adviser.

Paul Aemisegeo is the founder and CEO of PayrollMart. Comment below or email editors@workforce.com.