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HR Support on Payroll Processing and Payroll Systems Management
Editor's Note: Manage payroll more efficiently with the right automated system.
Overview: Payroll processing is full of complexity. Employers are responsible for paying their employees in a timely manner and for deducting and remitting any required payroll taxes, wage garnishments, tax levies and premiums for benefits, and for reporting payroll data to federal, state, and local governments. Luckily, there is an abundance of technology available to keep track of everything from the number of employees an employer has to the specific amount of each deduction from their pay.
Automated payroll systems (APSs), such as application service providers (ASP) and software as a service (SaaS) providers, use computer software not only to compute payroll but also to perform several other functions necessary to the payroll department. There are many system options available and much to consider in selecting and implementing the right system:
- Define needs and objectives - An employer should decide early on why it wants an APS and what it wants the APS to do.
- Choose a vendor - Some specialize by region or business size, some cater to multinational employers, and some will honor the extent to which the employer wants the service company to be involved in handling its payroll.
- Create an implementation timeline - This should include the time it will take to train staff in the new system, test the system and correct any glitches, and perform data conversion from the old system to the new one.
- Develop controls for the internal use of confidential employee and employer financial information that is stored in the system - This can be as basic as password protection to as complex as hours of employee access.
- Comply with SOX - If the employer is a publicly held company, compliance with the Sarbanes-Oxley Act of 2002 (SOX) is essential when establishing payroll system controls.
Rena Pirsos, JD, Legal Editor
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About this topic
Examination of payroll processing through functions such as automated payroll systems, and tips and guidance on their selection and implementation.