A lot of business owners find the process of getting payroll ready to go on a regular basis to be a stressful activity. When companies do not utilize a payroll company to look after this part of the business, there can be a lot of necessary manual work that falls on the shoulders of employees. This can increase the chances that human error will occur, leading to increasing costs for a business.

The deployment of payroll software can provide a much more stress-free payroll experience.

Processes can be largely automated, with the end result oftentimes being more accurate and efficient. This allows HR and payroll-focused staff to look more toward completing very high-value tasks rather than getting caught up with manual processes. Some business owners will still prefer to persist without some sort of payroll software. If this is the case, you will still have certain strategies that can lead to improvements to payroll processes. Conducting a payroll process review and looking out for certain key aspects can often prove to be very beneficial to a company’s productivity and bottom line.

Tip: Ask both your staff and the payroll team what they think about the payroll system

Reviewing your system

The initial step to take is to conduct a review of the processes that are currently in place for your company’s payroll system. This means breaking down the various procedures into their moving parts. Looking for standardization and centralization across the board are other key areas to focus on.

You also want to make sure that the timeliness and accuracy of the various payroll outputs are all in line. There are tools available for you to use that will help with process management, being useful to many business owners. It is also vital that you check for possible hidden costs when it comes to assessing the total cost of payroll. Some areas that can hide costs include compliance and overpayments.

It is usually a good idea to ask questions of both your staff and the payroll team to see what they think about the payroll system in its current form. They will often be able to provide very helpful advice and point out issues that a business owner may not be aware of. After adding together, the results from your review, you can start to put together a list of improvements that could be made to your payroll system. This helps you to identify where changes can be made quickly.

Data verification

When you are dealing with large amounts of data, you need to make sure that it is accurate and legit. You can analyze the data associated with your payroll system to gauge the performance of the processes that are in place. Having the ability to access key payroll data internally in a business is important for this step of the process. This will provide your team with the ability to use relevant data when making decisions. Naturally, this had to be done in such a way that the data itself is still kept safe and secure.

Taking a centralized approach when it comes to payroll systems is particularly important if you have employees and operations across different nations. You want to be able to get a clear picture in overall sense of the situation of your payroll systems. If all the systems are congruent and integrated with one another, this will be much easier achieved. This helps to ensure that you are looking at data that is up to date, complete, and accurate.

Everyone involved with the payroll process should be aware of what you are trying to achieve as a business

Realizing goals

Having goals for the performance of your payroll systems is important. This area of the business can often get overlooked when setting targets. It is important that everyone who is involved with the payroll process are aware of what you are trying to achieve as a business with this segment. Specific goals will allow people to narrow in their focus and have a target that can be quantifiable rather than being open to interpretation.

The specific goals that you might put in place can be dependent upon different variables. For example, the goals will vary depending on the number of workers who are a part of your payroll system or the complexity of your systems. If your previous goals were not achieved, it is a good idea to look to see why this was the case and what could be done to rectify the situation. A reassessment of goals may be necessary, particularly if your business priorities change or you have hit the old targets.

Tracking progress

There are many aspects of a business that will be tracked by management. This helps various departments to stay on track and to showcase improvements or highlight potential problems. Payroll systems goals should be no different. Companies will take different approaches in this regard, whether it is through the use of an SLA or KPI system. Some key metrics to look at when measuring progress in payroll include timeliness, error count, accuracy, total payslips, and the overall headcount.

There are even deeper level aspects you can look at, such as looking at the number of times payroll gets approved after a single review or figuring out where the errors come from. This allows you to identify bottlenecks and work to rectify them. The metrics you are looking at to judge progress should be linked to your goals. This allows you to assess how performance has changed as a result of alterations. There is also the option to look at benchmarks with other firms that are working in a similar industry and are of a similar size.

Many benefits by making improvements

Payroll process optimization can yield many great benefits for a business. It allows the owner to regularly check what progress is being made when clear goals have been put into place. Any errors or issues that are hampering operations can be identified and eliminated before they snowball into bigger issues. The payroll team also will be able to have a clearer picture of what the long-term aims of their work might be rather than focusing on day-to-day issues.

Obtaining regular feedback from the likes of employees about the payroll systems will make sure that your payment is being delivered accurately and on time. This can lead to both tangible and intangible improvements in the performance of your workers.

Have all your ducks in a row when it comes to compliance.

Another key advantage is that having all your ducks in a row when it comes to compliance can take a lot of stress off your shoulders as a business owner. This is why the use of payroll companies like Zenefits, Square, and ADP is so beneficial, as they can stay up to date with all of the changes in compliance needs on your behalf.


Any business that has employees will have to deal with some sort of payroll system. These can become very complex depending on the type of industry you are in or the structure of your workforce. This can muddy the waters and make it difficult to obtain a clear picture of the state of this department. This is why regular reviews are so important to ensure that you have the most cost-effective, compliant, and efficient process in place possible.