Improving Payroll Efficiency Through Documentation


A particularly effective strategy for payroll departments to reduce costs and increase productivity is to document department processes, identify nonproductive components of the processes, and modify or eliminate them, a payroll manager said Sept. 27.
Documenting department processes allows payroll personnel to enhance their recognition of ways they may, without compromising quality, decrease the number of components of a payroll process or decrease the duration of those components, said Martin Armstrong, CPP, vice president of payroll shared services for Charter Communications Inc., at the American Payroll Association's Fall Forum in Indianapolis.
“When workflow moves continuously through different systems and doesn't have a lot of unnecessary interruptions, that will reduce the process cycle time,” said Armstrong, who also is a member of the Bloomberg BNA Payroll Library Advisory Board.
The acronym S.M.A.R.T. is a tool for analyzing the utility of each component of a payroll process, Armstrong said. If a component is not S.M.A.R.T., meaning that it is not specific, measurable, attainable, relevant, and timely, that component should be eliminated or modified to make it S.M.A.R.T. and increase efficiency, he said. Determining the cost of a process component and whether cheaper alternatives are available that, if implemented, still would allow the process to be sufficiently completed also may help improve a payroll department's ability to generate value, he said.
Among the prominent types of waste regarding resources that may be identified by documenting payroll processes are those involving insufficient deployment or engagement of payroll personnel to accomplish tasks, Armstrong said. Managers should ensure that processes are refined to avoid circumstances when individuals with insufficient skills or experience are assigned to complete tasks that may be efficiently completed only by those who are sufficiently skilled or experienced. Modifying processes so that individuals whose pertinent skills were underused gain opportunities to use them may increase efficiency, he said.

Identifying the repetitiveness of tasks, such as duplicative data entry, and refining processes to avoid such redundancy may decrease the required duration for some processes to be completed and allow for productive reallocation of time toward other tasks, Armstrong said.

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