Payroll Error Impact on Your Company

We have all heard of the impacts to your company when there is a payroll error on the employee-side, but have you ever considered the employer-side of the business?

Whether your payroll team is part of Human Resources or Accounting/Finance, there is a significant loss of productivity involved for the team.

• Out-of-Cycle Payroll Schedule: the payroll team needs to schedule the out-of-cycle payroll before it can happen. This involves entering the cycle information (pay date, in/out dates, and pay period dates) along with ensuring the appropriate pay codes and deduction codes are enabled. For example, you may have already deducted insurance premiums, so you do not want to deduct them again.
• Payroll Entry: the entry for the out-of-cycle payroll is typically a manual entry process. This can include entering hours (regular, overtime, premium pay, and/or time off pay), temporary tax codes, temporary labor cost fields, temporary pay rates, deductions, and/or memo codes.
• Reporting: most payroll reports generate automatically after a scheduled payroll processes. With an out-of-cycle payroll, reports may need to be manually generated.
• Benefits: if you have a carrier connection or 401k feed, these may need to be manually “pushed” after an out-of-cycle payroll.

Beyond the payroll team, other departments depend on payroll data to do their jobs. The accounting/finance teams need payroll data.

• Funding Payroll: whether your company uses an ACH debit/reverse wire or whether your company wires the funds to your provider, the accounting/finance team needs the documentation to support the transaction.
• Invoices: each payroll can create an additional invoice. This means either a check/wire/ACH needs to happen or an automated draft will happen. In both scenarios, documentation is needed to support the transaction.
• Fees: while most payroll providers have moved away from a minimum processing charge, these still exist in legacy contracts. There are also delivery fees for your second processing.
• Reconciliation: if your company is on Full Service Direct Deposit, you will have far less transactions to reconcile than if the paychecks clear your own account. In either case, more pay cycles equates to more transactions to reconcile.
• General Ledger Interface: your payroll software creates a General Ledger file each time payroll runs. Additional pay runs mean more files have been created and these need to be uploaded into your financial software.

If you have errors, we can help! While every error cannot be eliminated, some can. Let Chad Dresnick LLC help you with processes and automation to minimize errors.

Are there ways to minimize out-of-cycle payrolls? Yes!

• Use Time & Labor Management (TLM) software that integrates with payroll.
• Run validation reports to ensure all employees are being paid.
• Review preview reports for Automatic Pay Cancellations and Inactive Employees with Paydata.
• Check your Employee Change Report and Unused Deduction Report.

If you have errors, we can help! While every error cannot be eliminated, some can. Let Chad Dresnick LLC help you with processes and automation to minimize errors.