Managing Your Money

7 Habits of Highly Effective Payroll Managers

1. Be organized

Payroll managers must deal with a mindboggling array of names, numbers, records, reports and deadlines. The good ones have a system in place to keep track of it all. Maintain a prioritized “to-do” list (preferably using a computer program such as Microsoft OutlookTM). Make effective use of information management technology and delegate or outsource where appropriate. For the records you do keep yourself, have a clear filing system for storing them in chronological order. Label everything clearly so that when you're audited, you can pull out the binder and say, “here it is.” Just as important as maintaining good records is having a process in place toidentify and destroy the outdated ones.

2. Be accurate

Being accurate doesn't require you to be perfect. After all, to err is human. But you should have a process to catch errors before they affect your employees. Compare the payroll input to attendance records before you submit it for processing. Check again when the payroll comes back. Also, balance the totals and generate an audit report, if available. Each additional review increases your odds of catching a mistake. A second key to accuracy is scheduling your work well in advance (see Habit #1). This prevents you from being rushed, a contributing factor to many errors. Allow time for verification between your pay period end date, input date and delivery date.

3. Know the rules

Be aware of government deadlines, as well as current recordkeeping and reporting requirements. Don't worry — you don't have to know all the regulations by heart. Just have someone on staff, or on call, who can alert you when a new regulation affects you. As an ADP client, for example, you routinely receive notices of many due dates and new requirements. You should also know the unique rhythms and cycles of your company. When are the peak overtime periods? When does management need certain reports for its own business planning?

4. Communicate

Knowing how to perform your job well is a good start. But your employees and associates must also know their role in the payroll process. That takes good communication on your part. Provide formal training to your associates. Give employees clear written explanations of your organization's policies and procedures, especially paperwork requirements and deadlines. It's also a good idea to periodically repeat these communications. Once is not enough. Another key to good communication is being visible and accessible. People should feel comfortable approaching you with any problem or question.

5. Get it in writing

Few communications are as critical and important as payroll communications. With a written record, there's less chance of a misunderstanding as to what was agreed upon. The documentation also helps support your case if your actions are later contested. Publish a written summary of attendance and reporting policies. Maintain detailed written records of absences, so that an employee's situation is always clear. Keep copies of payroll-related correspondence, especially correspondence with the IRS.

6. Be firm

It's human nature. Employees will ask you to “bend” the rules from time to time. Know when you have the latitude to make exceptions and when you must stand firm. For example, it may seem harmless enough to fill in a time card for an employee, but it's a violation of labor law. If you hire an employee who asks to show you his Social Security card “later,” you may end up hiring an illegal alien — or a fugitive from the law.

7. Show empathy

A good payroll manager enlists support and cooperation from employees. Be patient in answering their questions. Maintain good relations with department heads. When you must lay down the law, try to explain why a requirement is necessary. For example, “You need to review my report by Friday so that I can correct any errors before the payroll goes out on Monday.” Point out how the employee or department head will benefit. Remember also that some employees live from week to week — they're counting on that paycheck. Acknowledge their concerns and be ready with alternatives. For example, some companies offer a modest cash advance to employees whose paychecks have been delayed.

Helpful Resources for Payroll Professionals

Excellent payroll managers are constantly improving their skills and knowledge. Some recommended resources:

• PayTrain® is a computer-based training program that addresses every aspect of the payroll profession, from payroll basics and federal taxation to benefits withholding, payroll accounting, information systems and payroll management. For information and ordering, visit www.americanpayroll.org/paytrain.html,or call 1-800-444-5015.
• The ADP Institute for Educational Excellence offers informative seminars on payroll and HR topics. Visit www.adp.com/info/WPBP.htm, or call 1-800-588-5030.
• Successful Manager's Handbook: Development Suggestions for Today's Managers. A practical guide to on-the-job activities, with suggestions for improving your managerial effectiveness. Edited by Brian L. Davis, Susan H. Gebelein, Lowell W. Hellervik, James L. Sheard, and Carol J. Skube.

Article from www.adp.com.