Payroll
Payroll is one of the most sensitive topics in any corporation - sensitive by nature but also complex depending on the jurisdiction and bonus scheme/deferred compensation.
Journal Interface
Any interface entries between third party system and the general ledgers should be done in less than 5 mins unless there are any issues with any systems.
I worked very closely with the HR department and put in place processes about any new joiners, new department or new employee benefits, having resulted in a very smooth monthly process.
Reconciliation between payroll and general ledger
Payroll is one of the main expense in the profit and loss and yet it is not always reconciled with any financial statement. Not only do the payroll entries need to make sense on the balance sheet but also in the profit and loss.
The profit and loss is reviewed by various stakeholders, explaining the numbers and potential variance to them saves everyone a lot of time.
Temporary payroll system for Philippines
A shared service centre was set up in Philippines. Their payroll process was poorly managed and employee taxes were not deducted from their first payslip. The company was to adjust the unpaid taxes on the last month of the year (the staff was not made aware of this).
Results
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Payroll is done by HR department
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Payroll is maintained in a specific payroll system
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Journal entries need to be processed to the general ledger
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Finance manages the journal entries
Situation
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Manual and lengthy process (half day)
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HR reformatted export file created by the payroll system
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No consistent monthly process in place
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Lack of understanding of the Finance/HR process
Findings
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Designed process between HR/Finance within the deadline
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Built flexible system to automatically create journal entry
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Reviewed HR submission and formatted payroll output file
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Created bridge/table between payroll and general ledger
Role
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HR time saved: 1 hour per month
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Finance time to process: 2 mins
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Ongoing review of any new account/department
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Smooth monthly process
Results
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Direct Payroll is one the biggest expenses
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Payroll is maintained in a specific payroll system
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Management has no trust on the numbers/finance team
Situation
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No reconciliation between payroll system and general ledger
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Finance cannot explain accurately the numbers/variances
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Balance sheet reconciliation is not done/understood
Findings
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All journal entries posted are identifiable by system
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Created a trial balance by system
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Setup standard on balance sheet reconciliation
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Reviewed payroll feed and created monthly reconciliation between the profit and loss and payroll system
Role
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Direct Payroll expense is reconciled on monthly basis
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Finance time to process: 2 mins
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Allowed to prepare monthly staff reports by department
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Allowed to design an accurate payroll forecast
Results
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Shared Services centre was setup a few month ago
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High staff turnaround
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Overall staff number was growing every month
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Payroll is done twice a month
Situation
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Payroll is done on excel and its very manual
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Payroll taxes were not deducted appropriately
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Last salary payment was not paid on time due to poor maintenance of the payroll record
Findings
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Work with payroll to understand the payroll calculation
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Gathered all tax and other tax deductibles
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Created table with staff and all relevant information
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Reviewed and improved bi-weekly payroll process
Role
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Minimum input in payroll document
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Payroll tax and deduction done automatically
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Reduced process time of the payroll
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Less bad surprises from staff on the last month of the year