Payroll Best Practices

Lesson and Objectives

Reading
Assignment

1. Success or Failure with Best Practices

Chapter 1

The learning objectives for this lesson are to gain an understanding of:

• The most fertile ground for best practices
• Implementing best practices
• Best practice duplication
• Why best practices fail

2. Employee Time Tracking

Chapter 2

The learning objectives for this lesson are to gain an understanding of:

• Switching to salaried positions
• Reducing the number of pay codes
• Eliminating personal leave days
• Using honor system to track vacation and sick time
• Avoiding job costing through the payroll system
• Using exception time reporting
• Using bar-coded time clocks
• Using biometric time clocks
• Installing a Web-based timekeeping system
• Installing automated time sheet reminders
• Tracing time with mobile phones

3. Employee Benefits and Deductions

Chapter 3

The learning objectives for this lesson are to gain an understanding of:

• Prohibiting deductions for employee purchases
• Disallowing prepayments
• Minimizing payroll deductions
• Capping group term life insurance coverage at the IRS exclusion limit
• Charging employees a fee for garnishment processing
• Isolating in-pats and ex-pats in separate pay groups
• Including accrued vacation in the payroll remittance
• Posting vacation information in the timekeeping system
• Automating 401(k) plan enrollment
• Granting employees immediate 401(k) eligibility
• Automating garnishment transaction
• Automating option tracking
• Creating employee self-service for payroll changes
• Creating employee self-service for benefit changes
• Linking employees to withholding calculator of the IRS

4. Payroll Forms and Reports

Chapter 4

The learning objectives for this lesson are to gain an understanding of:

• Eliminating reports
• Posting forms on an intranet sit
• Automating the annual W-4 review notice to employees
• Issuing electronic W-2 forms to employees
• Basing pay raises on an automated step increase report
• Storing I-9 forms in an electronic format
• Automating fax-back of payroll forms

5. Payments to Employees

Chapter 5

The learning objectives for this lesson are to gain an understanding of:

• Using direct deposit
• Stopping delivery of checks to employees at the office
• Paying employees through payroll cards
• Offer clear cards to employees
• Offering prepaid flexible sending account cards
• Offering prepaid incentive cards
• Offering relocating cards to pay moving expenses
• Sending payroll remittances by email
• Posting payroll remittances on the company intranet
• Allowing online payroll remittance viewing only if employees use direct deposit
• Installing ATMs at company locations
• Charging intercompany fees for manual paychecks
• Using automated folders and sealers for paychecks
• Using the IRS letter-forwarding service to deliver unclaimed paychecks

6. Commission Calculations and Payments

Chapter 6

The learning objectives for this lesson are to gain an understanding of:

• Simplifying the commission structure
• Constructing a standard commission terms table
• Periodically issuing a summary of commission rates
• Calculating commissions automatically in the computer systems
• Installing incentive compensation management software
• Paying commissions only from cash received
• Calculating final commissions from actual data
• Including commissions payments in payroll payments
• Lengthening the interval between commission payments
• Periodically auditing commissions paid
• Posting commissions payments on the company intranet
• Avoiding adjusting preliminary commission accrual calculations

7. Payroll Outsourcing

Chapter 7

The learning objectives for this lesson are to gain an understanding of :

• Outsourcing the payroll function
• Using web-based payroll outsourcing
• Outsourcing benefits administration to a payroll supplier
• Outsourcing tax filings
• Outsourcing W-2 form creation and delivery
• Linking hosted payroll processing to an ERP system
• Outsourcing unemployment claims management

8. Payroll Management

Chapter 8

The learning objectives for this lesson are to gain an understanding of :

• Creating a policies and procedures manual
• Issuing activity calendars to all payroll employees
• Creating a payroll training program
• Implementing cross-training
• Requiring payroll certifications
• Continually reviewing transaction errors
• Eliminating all transaction backlogs
• Processing nonpay-affecting changes during off-peak periods
• Implementing process centering
• Minimizing payroll cycles
• Minimizing off-cycle payrolls
• Storing upcoming transaction in dated folders
• Creating a year-end payroll processing checklist
• Simplifying the pay structure
• Linking the payroll and human resources databases
• Merging the payroll and human resources departments
• Linking payroll changes to employee events
• Linking the 401(k) plan to the payroll system
• Making electronic child support garnishment payments
• Installing manager self-service
• Automating employment and income verification requests
• Publishing answers to frequently asked questions on an intranet site
• Operating a payroll help desk
• Implementing a service level agreement with other departments.
• Designating intermediaries to maintain contact with fellow service providers
• Using the common paymaster rule to reduce payroll taxes
• Reviewing the impact of voluntary unemployment contributions
• Acquiring the unemployment experience rating of a predecessor organization

9. Payroll Systems

Chapter 9

The learning objectives for this lesson are to gain an understanding of:

• Consolidating payroll systems
• Installing an integrated human resources and payroll system
• Installing an enterprise workforce management system
• Installing a work-flow management system
• Implementing document imaging
• Installing a data warehouse
• Using a forms/rates data warehouse for automated tax filings
• Avoiding legacy payroll systems

10. Payroll Controls

Chapter 10

The learning objectives for this lesson are to gain an understanding of:

• Creating a backup system for payroll records
• Isolating access to the payroll check printing capability
• Scanning fingerprints at user workstations
• Incorporate copy protection features into checks
• Implementing positive pay
• Initiating direct deposit prenotifications
• Creating standard error-checking reports
• Reviewing payroll trends after each pay run
• Creating standard payroll audit reports
• Reconciling the payroll bank account every day with online Internet access
• Verifying that the payroll database has been updated with all manual checks
• Verifying amounts owed by employees at termination
• Verifying that year-end paid leave balances are accrued and carried forward properly
• Reviewing insurance for presence of ineligible family members

The learning objectives for this lesson are to gain an understanding of:

• Payroll transaction fees per employee
• Payroll transaction error rate
• Ratio of W-2c toW-2 forms issued
• Proportion of payroll entries to headcount
• Annualized wages per employee
• Net benefits cost per employee
• Revenue per employee

The learning objectives for this lesson are to gain an understanding of:

• Policies for payroll best practices
• Timekeeping procedures in a best practices environment
• Payroll processing procedures in a best practices environment
• Payment distribution procedures in a best practices environment

The learning objectives for this lesson are to gain an understanding of:

• Improving payroll management
• Reducing transaction volume
• Automating timekeeping\
• Implementing self-service
• Making electronic payments
• Installing metrics
• Ensuring ongoing improvements