The Myths and Truths about Payroll Service Bureaus

Transcription

1 The Myths and Truths about Payroll Service Bureaus Ken Madley, Senior Manager, Presales Consulting Kristen Wylie, Product Marketing Manager, Workforce Ready 1

2 Agenda Today s payroll challenges Myths and truths about service bureaus Facts about managing payroll in house Q&A 2

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4 Internal Payroll Challenges Most time-consuming aspects of payroll processing Gathering and approving time Correcting errors Capturing accurate time worked Processing manual checks Most challenging aspects of payroll processing Accessing data to run reports; payroll reporting Filing taxes Meeting the service bureau provider s cut-off window * Source: American Payroll Association Trendline Survey, December 2014 Does outsourcing payroll eliminate these business challenges? 4

5 Top Three Myths About Payroll Service Bureaus 1 The Service bureau does the heavy lifting sparing your payroll department the brunt of the work. 2 By outsourcing to a service bureau, you ll minimize payroll errors. 3 Outsourcing your payroll to a service bureau is more cost-effective than doing it in-house. 5

6 Myth #1 The Service bureau does the heavy lifting sparing your payroll department the brunt of the work. 6

7 Myth #1 False. YOU Do the Heavy Lifting The burden is on payroll Outsourced Payroll Inquiries: 1-2 payroll questions for every 3 employees Volume of payroll questions NOT reduced by outsourcing Cost: $21.74 per payrollrelated inquiry Payroll Professional Source: Bloomberg

8 The Compliance Burden is Yours FLSA Tax Accuracy New Hire Payroll Professional 8

9 You Prepare the Data for Processing Benefits Timesheet Attendance Job & Pay Changes Payroll Professional 9

10 You Must Validate the Data for Processing Are All Data Changes Accurate? Update & Timesheet Accuracy Timesheet Data Has Been Approved Payroll Professional 10

11 Whoops, I Need to Fix That Void and Replace Checks Post Payroll Errors Stop Pay and Replace Direct Deposit New Hires NOT Processed RETRO Pay Missed Payroll Professional 11

12 Reports Are Hard to Come By Gross to Net Accuracy Pre & Post Payroll Run Reporting Unemployment and Disability Benefit and Tax Reports New Hire Compliance Reports Check and Direct Deposit Reconciliation Payroll Professional Custom Reports & Spreadsheets 12

13 What Are You Really Outsourcing? On-time with 100% accuracy required Collect Time Worked Update Employee Information Gather/Approve Time Calculate Pay Policies Payroll Calculation and Finalization Calculate Gross Pay Transmit Payroll Calculate Net Pay Complete Payroll Print Checks File Taxes Create G/L Entries Generate Reports Garnishment Payments How much are you paying for these few steps? 13

14 What Are You Really Outsourcing? Outsourced On-Premise Outsourced Enter HR Changes Gather Timecard Data Calculate Pay Policies Calculate Gross Pay Edit Gross Pay Data Transmit Payroll Calculate Net Pay Print Checks & Reports File Taxes Distribute Checks Garnishment Payments Create Adjusting Entries Void Incorrect Checks Create Manual Checks Kronos Payroll On-Premise Outsourced Enter HR Changes Gather Timecard Data Calculate Pay Policies Calculate Gross Pay Edit Gross Pay Data Calculate Net Pay Finalize Payroll Print Checks & Reports optional File Taxes optional Checks Online/Print Garnishment Payments optional Create Adjusting Entries Void Incorrect Checks Create Manual Checks 14

15 Myth #2 By outsourcing to a service bureau, you ll minimize payroll errors. 15

16 Myth #2 False. Hidden Headaches/Costs My paycheck is wrong Me too Me too Not Another Payroll Error! 16

17 Myth #2 Data Errors Duplicate data entry Missed punches from thirdparty time and attendance Unable to Access Data / Reports 17

18 Myth #3 Outsourcing your payroll to a service bureau is more costeffective than doing it in-house. 18

19 Myth #3 False.! Outsourcing did not make Top 5 strategies for controlling payroll department costs 1. Streamline payroll processes and procedures 2. Establish new performance goals for payroll staff 3. Reduce staff travel, conferences and seminars 4. Implement new or upgrade software/hardware 5. Employee self-service Source: Bloomberg

20 Myth #3: Staff Requirements Payroll Staff Ratios by Level of Outsourcing Payroll Department staff per 100 employees Minimally Outsource/Not at All Partially Outsource Mean Median Mostly/Completely Outsource Does outsourcing actually REDUCE the volume of internal staff? Source: Bloomberg BNA 20

21 Again -- What Are You Really Outsourcing? Outsourced On-Premise Outsourced Enter HR Changes Gather Timecard Data Calculate Pay Policies Calculate Gross Pay Edit Gross Pay Data Transmit Payroll Calculate Net Pay Print Checks & Reports File Taxes Distribute Checks Garnishment Payments Create Adjusting Entries Void Incorrect Checks Create Manual Checks Kronos Payroll On-Premise Outsourced Enter HR Changes Gather Timecard Data Calculate Pay Policies Calculate Gross Pay Edit Gross Pay Data Calculate Net Pay Finalize Payroll Print Checks & Reports optional File Taxes optional Checks Online/Print Garnishment Payments optional Create Adjusting Entries Void Incorrect Checks Create Manual Checks 21

22 Myth #3: Higher Than Expected Total Cost of Ownership (TCO) Do you have consistent and reliable pricing? What is your PEPM pricing vs. your average bill? Add-on fees each month: Year-end processing Printing W-2s Quarterly/annual tax forms Reporting Special payroll runs Unexpected extras 22

23 Sample Service Bureau Solution: What You See vs. What You Get HR DB FIELD DB T&A PAYROLL FACILITIES DB GENERAL LEDGER DB HR Headquarters Field Office Service Bureau IT Department Finance Department BENEFITS DB Administration Costs Multiple Databases Benefit Provider Never Ending Fees Inability to Access Reports and Data How Can You Manage This Without Complete Automation? 23

24 In-House Payroll Can Be a Better Option Payroll Options Outsource In-house In-house and Outsource 23% 19% 58% SMB Organizations: 40% Outsource 60% In-house Source: American Payroll Association Trendline Survey, December

25 Facts About Managing Payroll In-House 1 Modern technology makes a difference. 2 Integrated systems yield efficiency and cost savings. 3 Instant access to data 25

26 Fact #1: Modern Technology more than 10 Years Using Current Payroll Process 5-10 years 2-4 years one or less Source: American Payroll Association Trendline Survey, December

27 Fact #2: Proven Benefits of Integration! 86% of payroll staff believe that automating the entire pay process from time collection to payroll processing in a single system would result in reduced errors, accurate data, control, and real-time access to data for reporting Source: APA Trendline Survey, December

28 Fact #2: Proven Benefits of Integration Integration not only improves accuracy, but also provides the foundation for accurate reporting across the organization Keeps overhead costs down Decreases the amount of manual workforce management transactions Leads to fewer payroll errors in tracking time worked and handling payroll processing Organizations that integrated time and attendance with payroll: Had an almost 30% lower rate of payroll processing errors Saw 32% lower error eater in the tracking of actual time worked Avoided the 6% year-over-year increase in manual workforce transactions experienced by organization without integration Source: Aberdeen, Total Workforce Management 2013: State of Time and Attendance 28

29 Fact #3: Instant Access to Data Payroll Management Gross to Net Tax Filing / Payment Services Direct Deposits Pay Stub Printing & Distribution Year End Processing General Ledger Processing 29

30 The Kronos Workforce Ready Advantage Single Solution, Single Database Single Solution, Single Database, Single Version of the TRUTH 30

31 Real-Time Visibility and Data Access Standard Reports: 150+ standard reports for HR, Timekeeping and Payroll Run reports for any time period; more than 40 predefined selections, such as Today, Last Week or Year-to-date Reports can be filtered, sorted or grouped by column Ad-hoc Reporting: Modify any report with easy-to-use, built-in reporting tools: Reorder columns, add or drop columns, even remove all columns and start from scratch Change a column label; adjust column widths; hide headers and footers; add or remove page breaks; change margins and font size; etc. Easily add custom columns Export reports to a variety of different file formats Reports can be scheduled and ed 31

32 The Kronos Workforce Ready Advantage Single Solution, Single Database GENERAL LEDGER DB Employee Field Manager Service In-House Bureau Payroll In-House HR Finance Department BENEFITS DB Benefit Provider Workforce Ready Integrated Solution Configurable Workflow Process Customizable Screens Schedule and Reports Complete Automation Reduces Costs and Risks 32

33 Thank you! Q&A 33

34 About Kronos With tens of thousands of customers around the globe, Kronos is the leader in workforce management solutions. We deliver industry-focused time and attendance, scheduling, absence management, HR and payroll, hiring, and labor analytics solutions and services in our cloud and on the go. Kronos: Workforce Innovation That Works. For more information contact your Kronos representative, call (800) or visit 34