One of the most time-consuming tasks in payroll is performing quality control on data. Data that feeds into the payroll process must be carefully validated before being used to calculate payroll, and likewise, outputs must be checked before payroll is approved and payments can be issued to employees.
This work is indispensable and must be performed over and over again, every pay cycle, with 0 tolerance for mistakes – and the vast majority of it is still done by hand.
This presents a huge opportunity for payroll teams to introduce automation, speeding up validation tasks exponentially, mitigating the risks of human error, and generally reducing the time payroll teams must spend on one of the most thankless tasks in the payroll process.
The cost of getting it wrong
In a recent study conducted by global accounting firm EY, they estimated that the cost of correcting a single payroll error was $291, and the aggregate cost of payroll errors per 1,000 employees per year was nearly $1MM.
Data validation is one of the most important tasks in payroll because the cost of payroll errors multiplies exponentially the later in the process they are caught.
Fixing an error in your gross to net is relatively simple and can be done in minutes, but doing so once payroll has been approved and processed is a whole different story. It requires communication with employees, relationship management, issuing new bank transfers, amending tax and compliance filings to reflect the mistake, and potentially other tasks depending on the specifics of each case.
This is hugely time-consuming and costly to the business because each incident must be addressed individually and the number of issues across a large population can be significant.
Between lost time, the direct financial impact of over or underpaying employees, potential regulator penalties, and the damage payroll errors do to morale and the relationship with the employee, it’s obvious why mistakes must be avoided at all costs.
And these mistakes must be caught in time. Fixing a number in a spreadsheet is infinitely easier than having to call an employee to apologize for getting their pay wrong and issue a new bank transfer.
The tradeoff between time and accuracy
The primary reason data validation is a headache for payroll teams is that everything in payroll runs on a timer.
With infinite time to complete tasks, or an infinite number of team members to execute them, it would be possible to guarantee 100% accurate data, 100% of the time. But that’s far from the reality of global payroll.
Payroll teams operate on tight schedules and with the minimum staff needed to be able to execute consistently – and some are chronically understaffed and under-resourced. In these situations, working overtime is extremely common and payroll teams must make choices on what to prioritize.
Furthermore, the time required to validate data scales linearly as the organization gets bigger, as do the number of potential errors that need to be found and fixed. This quickly becomes unsustainable and can be a huge drain on the payroll team’s time.
Introducing Payzaar Automated Data Validation
To solve this problem, we are introducing Payzaar Automated Data Validation. With this feature, we aim to make the data validation process a breeze for payroll teams by allowing them to manage by exception.
Currently, payroll teams must comb through gross to net data by hand to locate errors and fix them. Usually, fixing these errors is not time-consuming, it’s the process of manually searching through hundreds or thousands of spreadsheet rows that takes hours of the payroll team’s time.
Payzaar’s Automated Data Validation eliminates the need to manually locate errors in your gross to net by automatically detecting variances between payroll inputs and outputs and highlighting them for your team.
The functionality allows users to filter their data and view only where variances are present, and to make changes to that data in real time to fix errors and mistakes.
Additionally, Automated Data Validation automatically detects joiners and leavers movements, highlighting employees that have joined and left the payroll in the ongoing cycle, allowing the team to easily verify if any new additions have been missed, or if a person that shouldn’t be on the payroll still is.
Together, these features allow the payroll team to focus its time on fixing known errors instead of poring over spreadsheets by hand trying to find them, greatly reducing the time spent on data checking and validation overall.
Payzaar Automated Data Validation will be launching at the end of April and will be available for all current customers to begin upgrading their global payroll workflow.
If you’re looking to automate your data validation processes, we’d love to show you how Automated Data Validation can cut down your cycle time, improve the accuracy of your payrolls, and increase the efficiency of your payroll team.
Book a demo with our team and we’ll help you get started in no time.