This practical payroll checklist will help you assess the effectiveness and efficiency of your payroll processes.

Having smooth payroll processes is a game worth playing. You can prevent payroll mistakes, free up time for strategic HR and payroll activities, and reduce payroll processing costs by up to 80%.

In this article you’ll find:

• A practical 15-point payroll effectiveness checklist 
• The 8 most common payroll mistakes and 5 solutions
• Steps to improve your payroll process 
• How modern technology can help you get your payday right

Ready to take your payroll to the next level? Download our FREE guide to avoid costly payroll mistakes, assess your payroll, and identify areas for improvement!

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Payroll processing checklist to assess your payroll performance

Before taking steps to change or improve your payroll system, you must understand the effectiveness of your current process. Honest answers to some crucial questions are a good starting point.

We’ve prepared the following payroll processing checklist to help you identify*: 

• What works well in your payroll process
• What can be improved
• What needs decisive action

*The information, data and guidance provided in this article is for general information purposes only and does not constitute professional or legal advice.

Payroll effectiveness and efficiency checklist

Payroll effectiveness and efficiency checklist [text version]

How effective and efficient is your payroll system? 

1. Do you handle payroll yourself or do you outsource it? Do you have to hire accountancy firms, tax advisors, or other experts to make sure you process payroll correctly? How does it work for you (consider the cost, process efficiency/effectiveness, and the frequency and gravity of payroll errors)?
2. How much time and how many people does it take to run payroll in your company every month/week?
3. How much time does your HR/payroll team spend on repetitive admin tasks?
4. How much time does your HR/payroll team spend on manual data entry and salary calculations (potentially in Excel spreadsheets)?
5. Does your HR/payroll team have to correct many errors every month? If yes, how much time do they spend on that? How often do your employees report payroll errors?
6. If payroll errors are an issue, what are their consequences and costs?
7. Do you have an effective and efficient employee database? If yes, is it well-integrated with other systems?
8. Have you missed any critical payroll-related deadlines in the last 3/6/12 months? If yes, what were they, and what were their consequences?
9. Is there a high employee turnover at your company? If yes, what are the reasons? Do you need to dig deeper to understand it better?
10. Does your HR/payroll team have enough time for strategic tasks, employer branding activities, and boosting employee engagement?
11. Which payroll and HR tasks can you automate? How much time will it save you?
12. Does your company resist automation? If yes, what are the main reasons behind it?
13. Is your payroll system flexible enough to operate well in non-standard situations, such as high-volume hiring, high turnover, calculating bonuses, deductions, or paying gig workers and/or employees from different countries? Does it involve manual work in your organization?
14. Based on previous questions, what aspects of your payroll aren’t working? Can you think of 2-3 alternative, untried approaches? Is there an entirely different way of doing things?
15. Are you making the most of modern HR and payroll technology? Are you already using it?

Payroll system checklist vs. the most common payroll mistakes

Payroll mistakes result from poor payroll processes. Payroll processing is about ensuring employees get paid correctly and on time. Unfortunately, this is not something employers are capable of getting right every time and/or in every case.

The most common payroll mistakes include:

1. Wasting time and money on manual payroll processing
2. Miscalculating pay and misclassifying employees
3. Wasting time and money on fixing payroll errors
4. Low flexibility of your payroll system
5. Missing payroll deadlines
6. Poor payroll records management
7. Having a poor payroll process
8. Payroll processes slowing down your growth

For more detailed information about the 8 payroll errors, check out our article: “The 8 Biggest Payroll Errors Most Employers Make”.

No company is immune to payroll errors, but all companies can minimize their number. Using a payroll system checklist is a good starting point to ensure a mistake-free and compliant payroll process.

5 solutions for improving your payroll performance

Check out the recommendations below to see how you can avoid payroll mistakes and improve your payroll performance.

#1. Streamline your payroll process

Make sure your payroll process works smoothly, and your system is flexible. Don’t risk forgetting to meet important deadlines or to send forms on time.

Go through and spring-clean your existing records. Use a proven, modern system to gather all the relevant details about your employees.

#2. Take care of your payroll documentation

Ensure your payroll admin has all the necessary information, data, and processes to handle the payroll process properly. Make sure you reduce manual payroll processes to a minimum.

Does it make sense to use your HR team’s time on manual data entry, salary calculations in Excel spreadsheets, correcting payroll errors, and dealing with high employee turnover? Is it a good idea to give up the benefits of the innovative technologies of the 21st century? Can your company afford (more) problems with payroll? You probably know the answers to those questions.

Anna Jagiello, Digital Product Expert

Always keep backup records if something happens to the original files/your device or software crashes.

#3. Solve payroll problems quickly

If payroll errors occur, resolve them immediately. If necessary, report them to relevant entities. Correct errors promptly to minimize employee dissatisfaction and avoid penalties.

In the case of minor payroll errors, you can usually do one of the following:

• Cancel the payroll immediately, make updates/corrections, and reprocess it.
• Run an additional manual payroll for the affected employees only (with the necessary adjustments).
• Make adjustments on the next payroll to counteract previous mistakes.

#4. Solve payroll problems before running payroll

If you have access to payroll software, run a few key reports before processing payroll, e.g. deductions summary. This will help you catch and prevent mistakes. 

Additionally, to prevent payroll errors:

• Make sure you adhere to local legislation. 
• Provide your employees with automated, clear, and easy-to-read payslips so they understand what they’re paid for.
• Stay on top of ever-changing laws and policies, especially if you operate globally.
• Create a payroll checklist (for yourself and your administrators) to keep track of all the process steps.
• Keep a list of all the changes made during a given pay period. Ensure that the system is up-to-date.

Do your best to spot payroll errors before they happen. Using human eyes alone for this may be too risky. 

Instead, invest in HR & payroll software.

#5. Use automation and AI for better data collection and decision-making

Payroll and HR need better data for better decisions. Together, payroll and HR can gain an excellent collective understanding of their employees and what makes them want to stay or leave (whether pay-related or not).

Unfortunately, HR and payroll departments have lagged behind in this regard. Fortunately, today AI, automation, and modern HR and payroll software can help them analyze key data and identify trends as well as pain points. This way, issues can be addressed proactively.

The significance of technology in HR and payroll is growing.

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Improve your payroll performance to increase profitability

Payday is directly related to profitability and the success of your business. That’s why you must: 

• Pay your staff correctly and on time (every time)
• Manage your payroll in a smooth, smart, and fair way

Otherwise, the risk of payroll mistakes and errors is high. You’ll also have less time for strategic HR activities and building a great company culture. Therefore, payroll has a critical role in employee retention. It’s also an area where you can automate unnecessary work.

As doing payroll manually is too risky these days, automated payroll may be your safest bet and can help you: 

• Get the basics right, like paying your staff accurately, on time, and with full payslip information
• Minimize payroll errors and reduce payroll processing costs
• Improve employee satisfaction by giving employees more flexibility and control (e.g. with tools like self-service payroll)
• Stay safe from legal consequences
• Reduce manual, repetitive work and processes that tools can do
• Free up time for strategic and employee engagement activities

Improve your employee engagement with HR Planner & Calendar 2023!

Thus, it’s worth creating a payroll master file for automation. Automation can help with specific (usually repetitive) tasks so HR departments have more time for those that require the human touch.

Symmetrical offers easy, automated payroll services with the support of a dedicated team of payroll experts to help you:

• Put an end to payroll and HR chaos by automating tedious tasks such as manual data entries or calculations 
• Hire and pay people in a cheaper, easier, and more automated way
• Connect all your HR-related systems and integrate them into one automated process
• Improve your payroll performance on unprecedented levels

Payroll performance checklist: conclusion

It’s worth assessing your payroll performance and investing in payroll technology to get your payday right.

Do your best to reduce payroll mistakes to a minimum, and pay your employees accurately and on time (every time). Use the right payroll services to help you with payroll management. 

Automation combined with expert support makes things easier. It’s so simple.

Interested in mistake-free payroll? Download our payroll guide!

Sources

8 Must-Have Benefits of Automated Payroll
Common Payroll Mistakes
8 Definite Benefits Of An Automated Payroll System
Automated Payroll: Benefits
Employee Payroll Records
HR automation in 2023
Is salary important to workers?
The Risks of Poor Payroll for Businesses
Top 5 Ways Payroll Automation Will Benefit Your Business
7 Ways Payroll Automation Is Beneficial for HR
How to Prevent Common Payroll Processing Mistakes