The document discusses the significant role payroll can play as a strategic function in businesses, suggesting that improved payroll management can enhance efficiency, reduce operational costs, and increase employee engagement. It highlights the importance of accurate data and key performance indicators (KPIs) in identifying and resolving payroll errors, thereby driving value and compliance. Additionally, it emphasizes adopting technology and self-service options to streamline payroll processes and improve overall business performance.

1. White Payroll as a Value Driver
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www.advancedcomputersoftware.com/abs
Copyright Advanced Business Software and Solutions Limited 2012
An Advanced Business Solutions white paper
Contents
- Introduction and Executive Summary
- How can payroll drive value in your business?
Chapters
1. You can’t improve what you can’t measure!
1.1 Payroll errors are costly
1.2 Creating a solid foundation through data quality
1.3 Using Key Performance Indicators to drive service improvements
2. Driving value by reducing operational costs
2.1 Driving value through automation
2.2 Case Study: Phoenix Medical
2.3 Adding value with self-service
2.4 Case Study: Browne Jacobson
2.5 Adding value through integration of payroll and other services
2.6 Case Study: The Health Store
3. Driving further value with payroll
3.1 Employee engagement
3.2 Providing insight using reports
3.3 Case Study: Brendoncare
3.4 Using payroll to add value through selective outsourcing
4. Driving value by improving compliance and auditing standards
4.1 How payroll software can reduce risk and ensure compliance
4.2 The growing importance of payroll in auditing and reporting standards
5. Putting it all together: 10 ways to drive value through payroll
6. Notes and Further Information.
6.1 Sources
6.2 Further information
6.3 About Advanced Business Solutions

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Introduction and Executive Summary
The success of your business is inextricably linked with its biggest asset – people.
One of the fastest ways to derail employee engagement and satisfaction is to make a mistake with payroll.
Late salary payments, inaccurate holiday pay and miscalculated benefits can undermine morale and reduce
productivity.
So why do so many business leaders still regard payroll as a routine administrative procedure that is a cost
centre?
A typical company spends between 50 and 80 percent of its expenditure on payroll, and the costs of
preparing and administering these payments are significant. Despite this, a recent survey found that less
than half of businesses measure the efficiency of their payroll function, and three quarters said that they
had no plans to investigate implementing a payroll strategy to reduce costs and add value to their business
during the recession.
In the UK today, relatively few organisations see payroll as a strategic function, with half of companies
handing over full responsibility for payroll to the finance function, with one in five opting to outsource the
function completely.
It is about time that the payroll department is recognised as having a vital role to play in helping
businesses to survive and thrive in a tough economic climate.
How can payroll drive value in your business?
Payroll is a business critical function which can add value, often beyond an organisation’s expectations. A
strong and consistent payroll strategy, for example, reduces operational risk to the business by improving
compliance with legal and auditing requirements.
Automating and streamlining payroll also reduces operational costs and can virtually eliminate errors
in payroll administration whilst improving employee engagement and ultimately productivity. Whether
streamlining payroll includes outsourcing is dependent upon each organisation’s requirements and in-house
resources. For those organisations that have minimal in-house resource and payroll expertise, outsourcing
routine payroll functions can substantially reduce operational costs whilst enabling payroll managers to
focus on more strategic activities.
An organisation that uses smart analytics and reporting tools alongside industry benchmarking and key
performance indicators is provided with real insight into how effectively it is using its most valuable asset
– people. For instance, analytics and reporting tools can track payroll performance and present a unique,
holistic view of employee and workforce trends whilst providing early indications of business threats and
opportunities.
When these tools are tightly integrated with organisations’ human capital management (HCM) and financial
systems, they provide powerful analysis and insight.

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Chapter 1: You Can’t Improve What You Can’t Measure
Payroll Errors are Costly
One of the best ways that payroll can deliver value to the business is by improving the accuracy of payroll
administration and ensuring that the right information is collected in the right format and at the right time.
It sounds like a small thing, but one research study in the United States found that a third of all businesses
make payroll errors each year, and if all the over-payments made by employers were added together, it
would be enough to give every single US worker a ten cent hourly pay rise!
In the UK, the problem is just as widespread. What’s more, payroll errors don’t just cost your business
money in over-payments. When an employee doesn’t receive the right pay, at the right time, the impact on
morale and productivity can be substantial. For example, if employees are not correctly paid for overtime,
they may be reluctant to work overtime in future, impacting business productivity. If payments are
regularly late, internal rumours may start about the company’s financial health, which can then be picked
up by external sources with potentially serious consequences.
On top of this, there is the time taken to correct payroll errors. Figures from The Department for Business,
Enterprise and Regulatory Reform (BERR) (now The Department for Business, Innovation and Skills -
BIS) suggested that UK employers in mid-sized companies (employing 50-250 employees) already spend
around 3.5 hours per month, per employee administering payroll. Each correction is estimated to take a
further 20 minutes. Over a year, this burden will significantly increase the cost of payroll administration and
also impact on the time available for strategic projects.
Creating a solid foundation through data quality
Reducing payroll errors can add value to the business by decreasing unnecessary expenditure, reducing the
cost of payroll administration and increasing employee morale and productivity. But how do you do this?
The first stage in reducing errors is to understand where errors come from. Payroll managers should begin
by conducting a thorough audit of payroll data to identify how good the information that is being used
to administer payroll actually is. Many payroll errors actually come down to poor data quality such as an
incomplete bank sort code or a failure to update an employee’s personal details so that a pay rise isn’t
correctly back-dated or a payment is made to the wrong account.
Technology experts suggest that around 20 percent of data in a typical enterprise IT application is old,
outdated or duplicated. This would create a major headache, particularly if an organisation’s payroll
administration relies on data being pulled from one or more applications.
Inconsistency can also exacerbate problems. For example, an organisation’s benefits system may well
record an employee’s name as SMITH, JOHN, while the time and attendance system records that same
employee’s name as JOHN J SMITH. To add to the confusion, the payroll system could have the employee
listed as JJ SMITH. Similarly, one system might list Mr Smith’s job title as a warehouse manager working in
Manchester, but another system might record his old job in Stockport.
In reality, it is impossible to guarantee that every single piece of data within an organisation will always
be accurate. However, payroll managers should identify which data absolutely NEEDS to be accurate,
and focus on improving the quality of that data. This means removing duplication, recording new data
consistently and ensuring information is updated or deleted quickly and efficiently.
Data cleansing applications are widely available and relatively inexpensive, yet research from IT analyst
company, Butler Group, suggests that less than 10 percent of organisations audit or cleanse data within
their IT applications.Data cleansing tools work by using pattern recognition technology to deduce that
a 22-year-old Clare Smith, address 1 King Street and 22-year-old Claire Smith at the same address is

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probably the same person. The tools will also audit data within employee records and other payroll systems
to identify potentially missing, duplicated or inconsistent data.
Most companies, on average, can expect to find problems with as much as 20 percent of data within their
HR or payroll database. The software will help the data to be manually checked and corrected. This sounds
like a time-consuming task, but often the problems are very simple, for example, an operator may have
added an extra zero or missed a digit from an National insurance number, or perhaps a telephone number
is missing.
According to Butler Group, improving data quality can significantly improve the return on investment on
payroll systems. For example, you may process 10,000 salary payments each week using your payroll
system. If 5 percent of these payments are incorrect, then you could be wasting thousands of pounds until
these problems are discovered. In many cases, companies simply don’t realise that information is incorrect
and may be unwittingly over-paying employees for months or even years at a time.
Once the audit is completed, software tools can run monthly checks of data quality in the background,
providing an early warning of any data problems before the employee even notices a problem with their
pay packet.
The key thing to remember about data quality is that it’s easy to spend thousands of pounds cleaning up
your systems without considering the processes that may have led to the inaccurate data in the first place.
If you don’t address the root cause of the problem, you could easily find yourself back at square one a
year or two down the line. For example, if data cleansing indicates that there is a disproportionate number
of errors in employee bank details, you should examine how this information is collected and recorded.
Perhaps the collation process is confusing and by making it simpler, the number of errors introduced into
the system would be reduced.
Using Key Performance Indicators (KPIs) to drive better service
Once you are confident that your underlying data is sound, it is sensible to use this accurate data to
assess how efficient your current payroll systems are. It might sound obvious, but only 29 percent of UK
companies have metrics in place to measure payroll efficiency, according to a survey by ADP, one of the
world’s largest providers of business outsourcing solutions.
One reason for this lack of measurement is that while there are many industry-standard KPIs to measure
HR functions, there are relatively few KPIs for payroll functions.
It’s worth investigating third party KPIs or even devising your own, since good KPIs can provide early
insight into potential problems with payroll or employee trends generally, as well as helping you, as a
payroll manager, to demonstrate the value that the payroll function brings to the business. For example, a
KPI measuring the number of joiners and leavers on payroll could provide an overview of staff turnover –
an increase or consistently high level in one department or function might indicate a problem which needs
attention.
KPIs can also reveal trends over time, which may provide important insights into business processes. For
example, you may find that overtime increases in the summer despite an increase in new employees.
Identifying seasonality in payroll statistics can help businesses to gear up for regular changes such as by
introducing new overtime policies or changing recruitment practices. Some companies have also responded
to payroll KPIs by introducing annualised hours rather than fixed monthly hours for employees. This does
not affect the total paid to employees, but it does allow payroll to operate more efficiently.

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There are many sources of advice and information on payroll KPIs and some are listed at the end of this
white paper. Core payroll KPIs that you may possibly consider for your business include:
• Cycle time to process payroll
• Cycle time to resolve errors
• Average cost of payroll per employee
• Personnel costs as percentage of overall payroll costs
• Percentage of payments requiring retroactive adjustment
• Percentage of statutory returns filed late or incomplete
• Percentage of statutory returns filed with errors
• Overtime and sickness costs as a percentage of total payroll
• Average cost of producing payslips per cycle
• Percentage of HR budget spent on payroll
• Manual payroll payments as percentage of all payments
Remember that not every KPI is important for every business. Talk to management about what information
may already be collected and what insights they might find useful via the payroll KPIs. You may also find
it useful to talk to your HR software and payroll software providers about what KPIs are supported within
products, and how easily data can be extracted and analysed. However many sources of data you involve,
we would suggest not implementing any KPI until you are fully aware of:
• Which data is needed for the KPI measurement
• The cost of implementing this KPI versus the benefit expected
• Who will be responsible for ensuring the KPI is recorded and shared
• What information will be generated and how it will be used
Recording these KPIs is, of course, only half the story. The risk is that you might end up with a database
full of statistics that are never looked at and so only collect information that you have the resource, skills
and time to fully analyse. It is vital to appoint someone to be responsible for ensuring KPIs are consistently
and regularly monitored.
Chapter 2: Reducing Operational Costs
A recent YouGov survey found that, by submitting end of year returns online, UK businesses saved £90
million last year.
The reality is that technology can substantially reduce the cost of payroll administration and management
and provides opportunities to add significant value to the business through improved quality of service,
greater consistency and by freeing up time for payroll staff to invest in more strategic activities.
One of the key benefits of implementing payroll software is that it saves time. Research shows that the
typical UK mid-sized company spends 91 minutes per employee processing and administering payroll.
However, those companies using a payroll software solution found the time taken to process payroll was
just 16 minutes per employee – an astounding 85 percent reduction.

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Given the current economic climate, investing in the right payroll technology could save your organisation
tens of thousands of pounds a year in man-hours. This reduced operational cost could then be used to fund
more strategic, value-added payroll services and processes.
Adding value through automation
Many routine payroll filing tasks can now be completely automated using dedicated software solutions
developed by suppliers such as Advanced Business Solutions.
Pre-payroll calculations can be a time-consuming affair each month, but software can automate many
of these calculations, allowing irregular payments to be processed much more easily. For example, if an
employee works 39 hours per week before being eligible for overtime, but has taken sick leave in a pay
period, then an application such as the one offered by Advanced Business Solutions can automatically
make the calculations necessary to adjust overtime payments.
Other routine payroll functions that can be automated through using payroll software include:
• Automated payroll calculations, increasing accuracy
• Payroll preview and validation, reducing the risk of errors being filed
• Production of payroll statistics such as total payroll cost
• Automated online filing of returns and reports
• Automated application of updates to payroll calculations, for example, in response to changing
regulatory requirements
• Automated production and delivery of payslips
This automation can reduce the cost of administering payroll by as much as 80 per cent and UK
government statistics suggest that the benefits are most powerful in mid-sized and small companies.
When choosing a software solution for payroll, routine automation can, of course, reduce costs. But to truly
add value to the business, it’s important to look for a payroll solution that will manage exceptional events,
or which will allow you to carry out completely new processes.
For example, some payroll solutions can reduce the risks of payroll errors by using features to verify
data as it is entered into the system, preventing many errors at source. Software might also let payroll
managers plan ahead for future pay changes. So, rather than having to remember that an employee’s tax
status will change in three months’ time, or that a pay increase will be applied in three months’ time, it’s
possible to enter this information into a payroll application as ‘date effective’, meaning that the software
will automatically incorporate the changes to payroll calculations at the correct time.
Investing in payroll software also provides a perfect opportunity to review your payroll processes – if it’s
been many years since you looked at how you manage payroll, this is the perfect opportunity to audit the
steps involved. Rather than slavishly automating your existing process, consider how incorporating new
solutions such as automated workflow, employee self-service or online filing might make processes simpler
and more effective. This approach will enable you to get the best possible return on investment from any
software solution.
Case Study
Phoenix Medical Supplies, a UK distributor of pharmaceutical supplies, recently moved more than 3,500
staff to a new monthly payroll paid in arrears – the success of this major project subsequently won the

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company the Payroll Team of the Year Award as well as a Payroll Manager of the Year Award at the Pay
Magazine Annual Pay Awards.
Previously the company had relied on several different payroll applications and numerous paper-based
processes to administer its complex, combined payroll. However, standardising onto a single platform
meant that data only needed to be entered into payroll once, and could automatically be shared across all
systems.
Using Advanced Business Solutions, Phoenix Medical is now able to automatically run independent payrolls
for different parts of the business and the organisation is able to easily and quickly provide cross-payroll
reporting when required.
Phoenix Medical recently made the decision to move to a single, company-wide payroll that would see
3,500 staff paid monthly in arrears. Although the project truly tested the system’s usability, flexibility and
reliability, the rewards have been immense: automation has meant that 33,600 less payslips are produced
and postage costs have been reduced from £61,000 to just £28,000.
Adding Value through Self-Service
One way of changing processes to add value to the business is to consider using employee self-service.
Recent research suggests that half of UK businesses still haven’t implemented self-service, largely due to
worries about security and accessibility. These worries are unfounded as long as businesses use self-service
solutions with in-built high quality security features.
A common use of self-service within payroll is allowing employees to log onto the payroll system to amend
their own home address, bank and name details. Some companies also provide online payslips that
employees can download electronically over the Intranet/Internet.
Self-service can create a more motivated and engaged workforce and can reduce the number of errors
in payroll (providing you choose a software solution that makes it impossible for employees to introduce
incorrectly formatted data to the system). Electronic payslips also eliminate printing and distribution costs
and can improve security by allowing workers to download password-protected PDF files from their own
computers.
Case Study
Law firm Browne Jacobson used to rely on a basic HCM system with spreadsheets and paper records for
HR information, but decided to invest in a payroll and HCM platform to provide a more flexible and scalable
service to the business.
One of the key requirements of the new system was that it should enable Browne Jacobson to engage and
empower employees through self-service. Advanced Business Solutions’ HCM system offered the business
an integrated HR, personnel, self-service intranet and .Net workflow module that exactly matched their
requirements. The HCM system provided Browne Jacobson with a single, integrated platform from which
the firm could store, update, access and process payroll and HR information.
Browne Jacobson uses the self-service intranet capability within Advanced Business Solutions’ system to
reduce its use of paper records, helping the company to achieve its goal of being paper-light and more
environmentally responsible. Using this self-service module, staff at Browne Jacobson’s three sites can
access their current HR records and book, cancel and amend holiday requests. In time, employees will also
be able to access information on absence and self-certification.
The software has delivered tangible cost benefits. Three payroll administrators at the firm used to spend
three days compiling pay reviews, but the process can now be completed by one person in a single

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morning, using the reporting features within the system. It has also saved time processing pay changes
because information can automatically be calculated and checked – pay changes used to take 30 minutes
but now take just 5 minutes. This means that the firm can focus on more value-added activities.
Adding value through integration
Many payroll systems can be integrated with HR systems and this provides the opportunity to reduce
operational costs even further. For example, integrating time and attendance systems with payroll can
allow employees to fill in online timesheets, with overtime automatically calculated and fed into the payroll
system.
Integrating systems can improve reliability and accuracy because payroll draws information from a single
platform, reducing the likelihood of data quality issues.
Case Study
Specialist retailer The Health Store used to rely heavily on paper for much of its HR and payroll processes,
while payroll administration was outsourced to a third-party supplier. This created a range of inefficiencies
and problems and it was impossible for managers to monitor key business metrics such as staff absence
and its cost to the business.
To address this challenge, The Health Store deployed an integrated payroll and HCM application with
integrated HR, payroll, absence recording and attendance functionality. This integration means that it is
easy to see what is happening across payroll and HR, reducing costs by automating core processes and
vastly improving management reporting. Staff can easily track absence and what it costs the business,
which has helped the company to reduce absence levels from 7 percent to just 2 percent.
The key benefit of the system is that payroll quality has increased, with the number of errors significantly
reduced because information is pulled from a single, integrated platform. Information can also now be
stored electronically rather than on paper records, which is faster and cheaper to manage.
Another benefit of the new system has been a boost to staff morale – by implementing the time and
attendance module available in the HCM system, workers now know that clocking in and out means that
they will be paid correctly and on time, whereas previously, payroll information was frequently late. With
the implementation of the Advanced Business Solutions system, employees can now change their bank
details as little as three days before pay day and still receive payment on time.
Chapter 3: Driving Further Value From Payroll
This white paper has discussed the key steps to creating a solid data foundation for payroll and the
potential to use technology to reduce operational costs through automation, self-service and integration.
The following sections will explain how payroll can add value in other ways such as by helping with
employee engagement and by improving compliance – perhaps not the benefits that tend to spring to mind
when thinking about payroll!
The key ways that payroll can generate additional value for businesses are as follows:
Employee Engagement
In the current economic climate, many organisations are going through difficult times. Mergers and
acquisitions, changes to working patterns, redundancies and the closure of branch offices can all seriously
impact employee morale and engagement.
Maintaining employee engagement during turbulent times is absolutely vital. Employee engagement affects

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productivity, profitability and staff retention. If your workforce is not engaged; your organisation cannot
perform or compete effectively. Employees who are not engaged will also fail to promote the brand of the
company, which in turn will affect reputation and recruitment ability.
Payroll can help to drive engagement by ensuring employees feel well rewarded and valued by their
employer. Accurate and timely payments with clear information included on payroll slips help to improve
employee engagement. By providing employees with online access to reliable salary information, as well as
time and attendance details generates the confidence that they are being accurately and fairly paid. This
can also assist with staff engagement.
Providing insight using Reports
Another way that a good payroll software solution can add value to the business is through management
reports. Within software applications such as Advanced Business Solutions’ HCM system, it is possible to
easily generate reports that previously might have taken days to create – if it was possible at all. These
reports can be in relation to a variety of areas such as number of hours worked, staff overtime, salaries,
job grades and staff training needs.
Case Study
The Brendoncare Foundation is a registered UK charity, which runs ten residential care homes and nursing
homes and also provides outreach and day care services.
Brendoncare had been using a basic, stand-alone manual payroll system which was administratively
intensive and as such, a lot of information had to be printed out for payroll to be processed. As the
organisation grew, this became increasingly unworkable, so the organisation deployedAdvanced Business
Solutions’ Human Capital Management solution to improve payroll and HR processes, achieving significant
cost and efficiency benefits.
Using this solution, now means that records for past and present employees are stored electronically and
don’t need to be printed. Complex calculations for shift-based workers based across 11 different sites can
be done accurately online, while staff can easily create reports that can be exported into Word and Excel.
These reports allow management to easily see exactly how much staff are being paid, keeping a close eye
on costs.
Crucially, the payroll software reduces duplication of effort and allows staff to focus on activities that can
drive business value. Whereas information used to be entered separately into the payroll, finance and time/
attendance systems, now data is only entered once and shared across multiple systems. Care managers in
remote sites can even enter information, which is accessible by Brendoncare’s head office.
Moving to payroll software has cut the time taken to process payroll by 25 percent, and printing payslips
takes just 15 minutes rather than a full day.
Adding value through selective outsourcing
Another way to drive cost and efficiency savings is to outsource the payroll function to a third party.
Outsourcing the function allows organisations to benefit from the supplier’s specialist experience and
knowledge, while also gaining from the economies of scale of using shared infrastructure and resources.
Outsourcing tends to be the preferred option of organisations with limited payroll and IT resource with
research indicating that just a third of UK companies are currently outsourcing their payroll function.
One way to exploit the cost savings of outsourcing is to consider using a payroll bureau service to manage
part of the payroll administration process. For example, using Advanced Business Solutions’ payroll bureau
service, businesses can outsource time-consuming payroll administration, allowing the payroll team to
focus on more value-adding tasks.

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If you consider using a bureau service, it’s important to look for a flexible provider so that you have the
option to move as much or as little of the payroll process outside the company as you choose. It is vital
that you have full records and a full audit trail of anything a bureau company does. For example, Advanced
Business Solutions provides all customers will a full audit trail of all actions and can submit payroll on your
behalf, or provide a file to be processed internally.
Bureau services add most value to the business when you have the flexibility to change what is outsourced
as business requirements change. You must also ensure that any bureau provider you work with has
experience in handling companies of your size and if you need multi-company, multi-payroll or multi-frequency
payrolls, this should be handled by an agency with relevant experience.
Chapter 4: Drive Value by Driving Improved Compliance and
Auditing Standards
The only constant in the world of payroll is the constant of change.
For example, with the introduction of Real Time Information and Pension Autoenrollment, which impacts
the entire payroll department. RTI becomes mandatory from April 2013 for everyone. An HMRC pilot of the
RTI process is starting in April 2012 involving a number of software developers and employers. Advanced
Business Solutions is one of the software vendors participating in the pilot and as a result we have been
heavily involved in various forums and workshops with HMRC over the past year. With several customers
participating in the live pilot Advanced are ensuring that all software is fine tuned before the scheme
becomes mandatory for all clients. By participating in the pilot Advanced and our customers will have the
chance to influence and shape the final details of the scheme through constructive feedback to HMRC.
Payroll managers must be aware of all of these changes and how they may impact employees whilst
also tracking how they may or may not affect flexible schemes such as salary sacrifice programmes and
statutory payments such as maternity pay.
A payroll department that can easily handle these changes adds value to the business by reducing the risks
of fines for non-compliance, minimising disruption and also making the audit process faster and easier,
should it be necessary.
HMRC is currently standardising its penalty regime and organisations that can demonstrate that reasonable
care has been taken to provide accurate and timely returns are likely to receive fewer penalties than in
cases where there are unexplained delays or missing information, suggesting deliberate concealment.
Where a mistake is down to human error, HMRC can potentially fine an employer up to 30 percent of the
inaccuracy, known as potential lost revenue or PLR.
What defines ‘reasonable care’ is not explicitly defined so payroll managers should think about what
they could do to demonstrate this care to the business and potential auditors. It is suggested that as a
minimum, payroll processes should incorporate the following:
• Records must be complete and accurate
• Systems and procedures must be shown to be followed
• Taxes can be reconciled against returns
• The ability to demonstrate the decision-making process relating to returns and documents submitted
There are a number of ways to ensure this happens. Ask questions of your software provider to ensure
that you’re confident the payroll and filing process will be quickly updated to take account of new filing
requirements and changes to financial calculations. Staff must be trained to understand these new changes
and policies must be in place to ensure that new calculations are applied correctly and consistently.

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Customers using a HCM solution provided by Advanced Business Solutions file in-year and end of year
returns to HMRC. Every return is fully validated against HMRC’s quality standard to ensure all data is in the
correct format and is properly cross-validated. The software provides multiple levels of data checks prior to
returns being sent, with information being validated on entry (for example, when creating new employees
or importing employee data) and when data is entered through web applications, such as self-service and
workflow. If validation fails, a screen message will clearly tell the data operator of the specific problem.
In addition, the Advanced Business Solutions software lets payroll administrators create a ‘test file’ which
can be submitted to HMRC to say whether it was successful or not. If the user gets the ‘all clear’; they can
continue to send the live file. If any errors are reported, the return can easily be amended before it is filed.
The level of checking and validation provided by a good software solution can drive enormous value for
businesses. Advanced Business Solutions’ vendor reports from HMRC show that in 2010/2011, 99.97
percent of returns filed by users of Advanced Business Solutions’ HCM system were filed successfully to
HMRC.
Using an HMRC accredited payroll application is one way to reduce compliance headaches. HMRC compliant
means that the software is able to cope with any filing or accounting feature that may be required and
provides reassurance that, if HMRC changes the rules, the software will be updated to take account of this.
Payroll managers can add value to compliance efforts by:
• Establishing clear policies and using software to ensure these policies are followed
• Putting in place software that incorporates real-time reporting functions for audit
• Using HMRC accredited software to reduce the risk of filing incorrect or incomplete returns
• Ensuring employees are trained in compliance and regulatory issues and understand their
responsibilities

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Chapter 5: Putting It All Together
10 Tips on Driving Value through Payroll
1. Improving the quality of payroll information drives value by enabling automation and providing greater
reporting capabilities.
2. Reducing errors within payroll systems can save companies as much as 5 pence per employee, per
hour, as well as driving greater employee engagement and satisfaction.
3. Key performance indicators allow the organisation to benchmark itself against competitors and to track
performance over time.
4. KPIs can provide early insight into threats and opportunities facing the business around areas such as
employee turnover and seasonality of workforce trends.
5. Automating routine tasks can reduce time taken to process payroll by as much as 85% freeing-up
payroll staff to work on more value-added activities, or enabling organisations to reduce payroll
personnel.
6. Employee self-service reduces the administrative burden on payroll but can also drive value by
increasing employee engagement and reducing the risk of incorrect payments.
7. Integrating payroll with functions such as HR and finance drives value by improving overall data quality
and providing the business with fast and easy insight into critical payroll data. For example, integrating
payroll with time and attendance can enable overall reductions in absence or in statutory payments by
enabling the business to identify and address problems within the organisation.
8. Payroll can provide a means of driving value during periods of organisational change, ensuring that
mergers and acquisitions, redundancies and changes to benefits and statutory payments are made
promptly and accurately.
9. Payroll software can provide reporting capabilities which are enormously valuable to the business,
providing insight into liabilities and projected costs, as well as numbers of new employees, departing
employees and patterns in overtime. This knowledge can help business leaders plan effectively and
improve overall financial performance.
10. Payroll has a vital role to play in supporting business’ compliance and auditing efforts. Creating
effective policies in payroll that demonstrate reasonable care and provide a full audit trail of who is
paid, what they’re paid and when they were paid reduces organisational risk while driving service
improvement.

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Chapter 6: Notes and Further Information
Kennedy Information: HR Consulting Trends, 2008 report
Everest Research Institute: Global Sourcing in HR (2008)
Butler Group: Data Quality and Integrity, 2004
Forrester Research: HR Analytics Become a Must (2008) and HR’s Vital Role in an Economic Downturn
(2009)
Personnel Today magazine: Payroll responsibility passed between finance and HR (June 2008)
Further Information:
If you are looking for information about key performance indicators for the payroll function, some good
places to start include:
• Software vendors will often have an existing library of KPIs that are designed specifically with their
technology in mind – and if you need to measure something different within your HR and payroll
systems, then a vendor such as Advanced Business Solutions is probably the best place to start.
• The Chartered Institute of Personnel Development (CIPD) offers members guidance on KPIs relating to
both HR and payroll, and offers an online community where members can share information and tips
relating to KPIs.
• www.cipd.co.uk
• The KPI library: a searchable, online directory of key performance indicators for HR and payroll,
submitted by various businesses and voted on by users.
• http://kpilibrary.com/categories/hrm
• Business Link is a free government advice agency that provides introductory guidance on creating and
using KPIs in any business setting.
• http://www.businesslink.gov.uk - Please copy & paste the following link into your browser:
• http://www.businesslink.gov.uk/bdotg/action/layer?r.s=tl&r.l1=1074404796&r.lc=en&r.l2=1074428566&
topicId=1079681127
• You can download free key performance indicator guidance from the Institute of Chartered Accountants
website at www.icaew.co.uk - http://www.icaew.co.uk/enterprise/db/pdf/st12keyp.pdf
About Business Solutions
Advanced Business Solutions, an Advanced Computer Software Group plc company, provides leading integrated business applications and services that enable
public, private and third sector organisations to retain control, improve visibility and gain efficiencies whilst continually improving corporate performance.
It’s award-winning software systems comprise core financial management, procurement, human resource and payroll systems, integrated with a range
of collaborative, document management and business intelligence solutions . It also provides managed and bureau service options.
Advanced Computer Software Group plc is the UK’s leading supplier of software and IT services to the health, care and commercial sectors.
It comprises 3 main divisions and has 7000 customers and 800 staff worldwide.
For more information
Advanced Business Solutions is a brand name of Advanced Business Software and Solutions Limited, registered in England, company
number 03214465. Registered office: Munro House I Portsmouth Road I Cobham I Surrey I KT11 1TF.
t: +44 (0) 08451 606 162 f: +44 (0) 1932 584 001 e: marketing@advancedcomputersoftware.com www.advancedcomputersoftware.com/abs
Advanced Business Software and Solutions Limited recognises the trademarks of other companies and their respective products in this document.