When I was 19 years old—during the Y2K era—I started my first payroll job at a local hotel. My only prior experience amounted to filing accounting documents for a family friend's small business. I didn’t know anything about taxes, unions, or direct deposit. I hadn't yet filed my own tax return, and yet there I was, an ambassador to everyone's livelihood.
The payroll manager was a brave woman who believed in me. She was just three months away from taking maternity leave. The pressure was on for me to learn fast. Luckily, my boss was an expert in payroll and an excellent note taker. She had every process documented. But those notes were her only copy, and they were handwritten, so I had to write my own notes.
The first payroll cycles I ran were weekly. There were a lot of tasks to complete in a short period of time. As I followed my notes, my errors decreased, and I became more efficient with each subsequent payroll cycle. Eventually, my effectiveness created space for opportunities to learn other areas of payroll. My boss took her maternity leave three months later, and I felt confident people would be paid accurately in her absence. All I needed was my trusty manual.
The Value of Workflows
Throughout my career, the accuracy of the payroll depended on well-defined and well-followed workflows. Whenever I found myself executing a task without instructions, things went wrong. This made it scary for me to try new things, but if I took notes from what I learned during those mistakes, the next time always went better.
No matter how long you have been in payroll, and no matter what role you are in, there will be something new for you to learn—especially during global expansion. Once you’ve figured out the issues and work out all the mistakes, it is time to document everything so you stay on track. This also helps when you’re ready to guide others so they can help, which is nice when you need to take a vacation.
Designing a workflow, documenting it, and teaching it can be intimidating. A workflow is a revolving cycle that moves quickly, especially when the business changes. The following outlines how it is possible to manifest a complete guide to a payroll operation without putting yourself under too much stress.
Definition of a Workflow
First, let's start with a basic understanding of a workflow. By definition, a workflow is a series of tasks to complete to reach a repeatable goal. For example, delivering payments every two weeks. This is like a process, or a series of actions or steps, taken to achieve a particular end. The key difference is workflows are repeatable, while a process may only need to be done once, such as implementing a new system. Let’s take a look at how to create a strategic payroll handbook in five steps.
1. Outline the Workflows
Start building a payroll handbook with a simple list. Write down each workflow that happens each day for a month. Don't worry about the details or the processes (those one-time tasks or exceptions). Focus only on the recurring required tasks to pay people. As an example, here is a list of common workflows in a payroll operation:
- Finalize timecards
- Transmit payroll
- New hires
- Leave of absences
- Job changes
- Historical corrections
- Off-cycle payments
- One-time payments
- Work location changes
- Time off requests
- Benefit deductions and earnings
- Journal entries
Get the team involved in the list-making process. Assign each team member with the same task of documenting the daily workflows for a month. At the end of the month, gather all the lists and begin drafting the handbook.
2. Draft the Handbook
Once your master list of workflows is complete, you'll need to save the master list. In my earlier story of my first payroll job, you’ll recall how I rewrote my boss's handwritten notes into my own notes. When I became a manager, I had to share my notes, so I adopted word processing tools to make file and note sharing easier. Back then, we shared files on discs. Today, there are many ways that allow us to collaborate via cloud networks, shared pages, and project management platforms.
Digitized notebooks like Microsoft OneNote have changed the way I stay organized and manage operations. Information is shared and secured with protections, so it is accessible to the right people and doesn't get into the wrong hands. Hundreds of notebooks are stored in one place and are searchable. This means that pages and content can be easily reorganized as topics get dense, and everyone can collaborate in a consistent format. Therefore, a digitized notebook is the ideal tool for the payroll handbook. If you aren't using one right now, inquire with your IT team or browse the web for a free option and give it a test drive.
3. Digital Organization
To organize the workflows into a digitized notebook or other tool, first consider if there will be any variations to how a workflow is performed. Different pay cycles may require different tasks to be performed in a workflow. For example, a new hire in the United States is administered differently than a new hire is in Germany. Therefore, while each country will have the same areas, there will be different workflows within each:
- New hires
- Leave of absences
- New hires
- Leave of absences
4. Handbook Contents
In addition to the workflows, other content to add to the handbook could include the following:
- Mission statement (company, department, operation, squad, team)
- Technology platforms and account information
- Service partners and account information
- System administration, configuration, and scrips
- Data integrations
Ensure that the handbook does not include details about policies. If necessary, you can reference links to policies, but do not document things like, "a maximum balance of 300 hours can be carried over." Instead, you could say, "a limit is applied when carrying over hours (see policy for details)." This alerts the administrator on what to consider without defining the rules.
5. Document the Details
The next time you find yourself executing one of the workflows listed in the handbook, open your digital notebook, and start listing the steps. Don't worry about forming proper sentences or accurate spelling. Simply bullet out the tasks in the order they are performed. This will slow you down now, but it will speed you up later making it worth the investment. Since many workflows may be performed on a given day, set a goal to note the steps of one workflow a day, a week, or a month.
The frequency of tending to the notebook will reduce as the handbook is more established. But don't get comfortable. The handbook attention will increase again as the business grows because workflows will be added or changed.
Tips for Success
Every iteration of a payroll manual I have made has improved. Recently, I embraced digital notebooks and discussed the payroll handbook regularly with the team. I am proud of how well the handbook is working. The team is clear on the work they are expected to complete, which gives them confidence. They can collaborate on the content and influence the design of process improvements making them feel included. The handbook is accurate and a reliable source document for the one who steps up when someone in payroll is absent. Most importantly, as a manager, I am confident payroll is executed accurately and on time.
If you find the payroll handbook daunting, then maybe the operation is complicated. Still, make time to create the handbook for now. Later you can lighten the load of maintaining the handbook by updating how the work is done. I mentioned earlier how standardizing the workflows across multiple pay groups can reduce the documentation because each pay group task is performed the same. In other words, one set of notes can be applied to all workflows.
One way to standardize workflows is to leverage new technology or services. In 2020, I implemented a new global workforce management solution for time, attendance, and labor scheduling to complement our global system of record. Now that every pay group uses the same reports to close the period, the payroll handbook is condensed, and I can proudly claim global consistency on several primary workflows, and that's a win-win.
Regardless of your position in payroll, you can be an advocate and a key contributor in the creation of the payroll manual. If you don't have a handbook yet, review this article with people at your company and convince them how important this work is to payroll. Pitch the idea of creating the manual as a team goal and commit to contributing to it as a personal goal.
A payroll handbook won't be the last thing you author. To advance in your payroll career and to demonstrate your knowledge to be included in business strategy, you must be good at writing. Practicing with a handbook is a safe way to articulate the work required to pay people without judgement. The time will come when an executive will ask you: "What does it take to pay people, or do X?" When that time comes, you'll know how to answer that question, and how to answer it well.
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Iggy Svoboda, CPP, is the Senior Manager of Mobility and Payroll for Clif Bar & Company headquartered in Emeryville, California, where she supports U.S., Canada, and Europe payroll operations. She has been a payroll professional for more than 20 years specializing in workforce management and global expansion for business operations in food and beverage, professional services, and manufacturing.