Friday, November 16, 2007

You Got the Time?

You should be aware the shortcomings of many payroll systems when it comes to interfacing with Time & Attendance (T&A) systems.  The real questions are, “Do you need a T&A system?  What should you look for?”

This determination should be more than how many employees you have.  Consider the following:

• How difficult is it to determine regular hours, versus overtime and double time hours?  How many errors are made converting time to hours worked? 

• Do you have complicated union rules regarding hours? 

• Is accrued vacation time dependent upon hours worked? 

• Do you have remote locations?  Do you need to track each location separately?  Are your supervisors responsible for employees at multiple locations?

• Do you need project management accounting?

• Do your employees work different jobs at different pay rates?

• Does your payroll department have adequate time to process payroll, or is their hair-on-fire every pay period?

• Do you need to control access to certain areas of your buildings and offices?  Do you know that some T&A solutions offer this feature?

The good news is that the cost of T&A systems is coming down.  Time collection devices are getting cheaper and have more features (wireless, portable, easier configuration) than ever before.

Time spent on implementing a T&A system (providing you pick the right one) will be time well spent.  I would choose a T&A supplier that also has the time collection devices that you need.  Less finger pointing!

Before looking at or selecting a T&A system make sure that you have ALL of your policies and procedures regarding employee time keeping, organized and in WRITING.  This will ensure you select the right system and make installation easier and more cost effective. 

Decide on an employee identification system.  Don’t mix types.  Make sure it’s compatible with the time collection devices.  You’d be surprised how many times this step is overlooked.

Be certain that your payroll software supplier is kept in the loop and that they sign-off on this project BEFORE you commit to the T&A system, because they may have to provide an interface.

It will be up to you to push all parties to make this work, but it saves time and reduces errors!

Tuesday, August 21, 2007

Time & Attendance Nightmares!

I have been ranting about current payroll package nightmares.  I have barely scratched the surface!  Here are some additional points to ponder:

It’s hard to believe that there are some payroll applications where overtime is hard-coded for only a 40-hour week!  That’s it, just a 40 hour a week limit!  What are they thinking?  Overtime calculations vary with state regulations, occupation, union contracts, etc.  As an example, some California employee wage orders say overtime is anything over 8 hours a day, 40 in a week, and the first 8 hours if the employee works on the seventh day.  Agricultural and Hospital workers have different regulations.  Then there are double-time considerations!  If you have a union, all bets are off because the labor contract often contains minutia that supersedes everything else.  Employees under different wage orders don’t mix, as the system can’t determine proper overtime calculation methods for different types of employment.

Rarely do payroll applications provide a means to import payroll hours from a Time & Attendance (T&A) system.  Because of this, interfaces must be written in-house, or, heaven forbid, by the application developer or a VAR.  Even then it is never seamless. 

Communications between Payroll and T&A must go both ways.  I am sick and tired of entering the same information in both systems.  After a new employee is created in Payroll the T&A must be updated with his/her name, employee #, supervisor, etc.  T&A then determines regular hours, overtime, etc. at the end of each pay period and transfers this into Payroll.  In this day-and-age it should be mandatory that payroll applications have tools that will allow users to manipulate data to and from T&A without cumbersome interfaces.

I could go on and on about the current state of payroll applications, but I don’t have the time.  If you’re involved with your company’s payroll YOU know what the problems are.  It’s time to rise up and demand developers get off their collective tushes!

Thursday, August 16, 2007

Payroll Nightmares

I have recently been ranting about faulty G/L packages.  Now it’s time to turn my attention again to the sorry situation with Payroll packages.  Of all the financial packages Payroll is perhaps where the most improvement is needed. 

Here are some payroll points to ponder:

Can you believe that some payroll packages don’t distinguish the different status classifications that an employee may have?  Magically, they are either Active or Terminated!  What about on L.W.O.P., COBRA, Family Leave, Part-Time, Full-Time Exempt, Full-Time Non-Exempt, etc.?  Without this distinction certain benefits cannot be offered, leave balances may not be computed correctly, pay cannot be correctly computed, and the list goes on.  Without proper status codes the payroll application cannot process employees without manual intervention.

In addition, most payroll applications can’t handle multiple state income tax calculations within the same dataset!  If you are processing payroll for offices that are in different states, the payroll application software and data files will have to be duplicated in another dataset for each different state.  That means separate runs for each occurrence!  Another example is what professional sport teams have to deal with when they play away-games in another state.  Reporting these earnings to state and federal agencies becomes an even bigger nightmare!

Another pain in the backside is the inability to “post date” tax tables and pay rates.  In other words, you need to have the ability to set up new tax tables or a pay rate increase in advance and have it become effective on a given date.  We also need an “obsolescence date” to disable a table or rate when no longer active.

Now you have to remember to make table and rate changes between payrolls.  What happens if you have to re-issue a check that was originally issued with the old rates?  Tax tables and pay rates must be date driven!

Most current payroll applications are so terrible they shouldn’t be on the market.  Frustration with this situation just keeps building because developers don’t care! 

Stay tuned.

Tuesday, June 26, 2007

FLUSH PAYROLL!

I must sound like a broken record, but I know of no other way than to keep harping on how inadequate current Payroll & Human Resource packages are.  These packages should be flushed, and let’s just start over from scratch!

Of all of the financial applications that we run today Payroll requires more work-arounds than all the rest.  Current payroll packages FAIL in the following primary areas:

1. Unable to RECORD and MAINTAIN HISTORY of ad hoc payroll EARNINGS.

2. Unable to RECORD and MAINTAIN HISTORY of ad hoc payroll DEDUCTIONS.

3. LIMITED REPORTING capabilities.

4. DIFFICULT for payroll clerk to use.

Pertaining to the first 2 items, if developers didn’t provide for a specific pay type or deduction, you can’t add your own, especially if complicated calculations are involved.  This results in payroll departments maintaining spreadsheets outside of the payroll application.  These are dangerous as they are usually undocumented, usually not audited, and can lead to serious errors. 

The third item is somewhat self-explanatory and usually requires hours of IT time to develop outside applications that provide the needed reports.  Again, these can be dangerous, as they must be maintained whenever payroll packages change. 

The fourth item is hard to quantify.  But if any clerk has to activate more than one program to perform a simple function there is a loss of performance.  Stepping through several screens the operator can make mistakes.  Only an intuitive and experienced operator will remember the multiple application screens needed to perform a specific function.

As a manager I spent more time bailing out the payroll department than anything else.  Do you think anything will EVER be done?

Thursday, June 21, 2007

Immigration: The Challenge for Employers!

With all the flap about immigration, our government will eventually enforce the laws for employers who hire undocumented workers.  Employers that I have worked for have required documented proof in the form of a “valid” state ID and Social Security card.  The trouble is that these documents are easily counterfeited and available to those who want them.  If a job applicant presents these documents you cannot deny work.

Knowing this, how do you protect your company?  One way is to verify Social Security numbers with the Social Security Administration.  It can be done on-line for a few employees, or you can upload your entire payroll to the Social Security Administration. Social Security will then notify you of all those employees with phony SS numbers.  Wouldn’t it be nice if your H/R package would electronically do that for all new hires?  You bet it would!

Maintaining employee identification documents in the form of copies of the SS card, state ID, photos, etc., is time consuming, and documents could be misplaced, misfiled, or lost.  We desperately need an automated system that would have the ability to digitally record and assign these electronic documents to the employee’s H/R file in an easy to use, intuitive manner!

We need on-line verification and digital documents now, in time to meet regulatory standards.  Eventually, government will mandate we do it, and you can be sure they will want every piece of information gathered for the past 10 years!

Saturday, April 21, 2007

More Than a Paycheck!

Why should we have to accept a software developer’s idea of how a payroll system should be structured?  Most payroll systems available today are very limited in how payroll functions are computed and then reported.

For instance:  We have to accept their definition on “types” of pay; i.e., regular, overtime, double time, night differential, etc.  What if you need to calculate and report a type of pay that the software developer did not plan for?  What if your calculation is dependant upon historical data such as the accumulation of Month-To-Date regular hours?  The historical detail is gone too soon in some systems.  What about payroll deductions, such as health insurance, retirement, investments, and wage attachments?

The ability to report this information is just as important as the payroll function itself.  Most payroll packages have a simple departmental reporting structure, and that’s it.  Additionally, historical information is more than likely retained in summary records (see “Can the Buckets”).  You may not have access the detail data via this summary operation, and the report-writer software provided with these types of packages is generally weak.  Unless you have an I.T. department with the right reporting tools and plenty of spare time (yeah, right!), you may not be able to retrieve the particular information your management needs when they need it.

We need to demand that payroll systems be designed to include the ability to build your own methods of payment, calculations for payments, taxes, deductions, etc.  Why can’t we get a user-friendly, powerful report-writer as part of the system?

Payroll is more than just a paycheck!  Help!

Saturday, March 31, 2007

Green Tie and Purple Socks!

Back in the Stone Age, when I was taking a programming class, my instructor handed out a 2-page dialog on how to compute overtime.  It started out, “If an employee comes to work wearing a green tie and purple socks, parts his hair on the right side, and the barometric pressure is 29.05 and rising, and it’s the 3rd Thursday of the 11th month, and . . . . .” This went on for almost 2 full pages.  The last sentence went on, “This employee will receive double time, UNLESS . . . .”

While amusing, this dialog does point out the difficulty in computing an employee’s earnings.  Over the years, with the influence of government mandates, union negotiations, and well meaning but misguided Human Resource Directors, payroll systems have become very convoluted. 

What have the financial software providers done to alleviate the problem?  Nothing!  They let payroll departments do the difficult record keeping and computations by hand.  Of all the general accounting packages, payroll has to be the most difficult system to design.  That’s why most of today’s payroll packages fall short mark.  It takes a lot of effort, talent, and experience to design a payroll system, something most software houses lack!

Example:  How do you handle multiple payroll attachments?  Let’s say Crowdad Dwarski has been less than an ideal father; i.e., he’s a dead-beat dad with a couple of children, a tax lien from the Feds, and another from the State for back taxes.  Which lien takes precedence?  How much goes to each lien holder?  How much is left for Crowdad to live on? 

Another Example:  A union contract that states if an employee shows up for work on time for an entire month (wow, what a concept!) he gets a bonus of $.05 for every hour that he worked to be included on his 1st payroll check in the following month.  Additionally, if he’s not tardy for an entire quarter, he receives an additional $1.00 for each day he worked to be paid in a separate check the first Friday following the end of the quarter.  On top of that, if he makes it through the entire year without being late he receives $100.00 or .005% of his normal annual earnings, which ever is greater to be paid on the first Friday on January of the following year.

Can you believe this?  These are not unusual situations.  They’re everyday challenges for payroll departments.  You just can’t make this stuff up.  It takes the confused mind of a government official or some union lackey to dream up this kind of B%& S^*& !

Name me one payroll application that can solve these problems!