how to finally write those payroll procedures

©2016 The Payroll Advisor1

How to Finally Write Those Payroll Procedures

Presented on Monday, November 7, 2016

Housekeeping

©2016 The Payroll Advisor

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Our Focus For Today

How to organize your procedure writing process for best results

What steps to take to get this monumental task under control

How to write procedures in hours instead of days and weeks

How a well written procedure can help promote the importance of payroll in your company and increase understanding of the payroll function

How to revise outdated policies

How to draft uniform policies and procedures that support compliance with company policies, federal and state laws and regulations and sound fiduciary principles

How to use the procedure writing process to streamline payroll processes and clean up bad habits that may have accumulated over time

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About the Speaker


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Vicki M. Lambert, CPP, is President and

Academic Director of The Payroll

Advisor™, a firm specializing in payroll

education and training. The company’s

website www.thepayrolladvisor.com offers

a subscription payroll news service which

keeps payroll professionals up-to-date on

the latest rules and regulations.

http://www.thepayrolladvisor.com/

Why Have Procedures?


Ensures that each task is done completely, accurately and in the same manner each time it is performed

Allows for consistency when the task is performed by large departments

Excellent for training new employees

Great source, of course, for backup employees for small departments

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Added Bonus…


Documenting procedures forces you to look at how you are performing each process and helps in streamlining procedures and cleaning up bad habits that may have build up over the years

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Plus…


Assists new employees and especially new supervisors or managers in assessing and evaluating office procedures in a non-combative way

Helps in training the department and cross training as each procedure is written

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But How Should You Write Procedures?


Write for someone who has no payroll background

Write in plain English

Must be easy to follow

Must be totally accurate down to last detail

No step is too small to leave out

DUH!

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Easy to Say But…


It is difficult since most people writing procedures have a vast knowledge of payroll or many years experience

It is a very technical field covering wage and hour and tax law as well as computer requirements

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Keep an Open Mind…


The following suggestion may seem a bit silly but it is well tested and will work every time

You need to keep an open mind!

If you do it will help you write accurate and complete procedures…

And have a little fun as well…

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So What Is This Method?


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Write your procedures as if

you were writing for an alien from another planet!

No I am Absolutely Serious!


If you develop a “person” to write for and keep that person in mind while writing it helps keep you focused on keeping the procedures simple and in plain English

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But Why An Alien?


Why “build” someone?

Why not just use a current staff member?

Since most payroll professionals don’t know any aliens first hand it is easier to develop the character

Expertise of staff members can change over time

If “person” leaves no guarantee new staff member will have the same attributes or experience.

Forces you to establish the minimum norm for the department.

Actually put it in writing

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Here’s My Alien…


His name is “Zot” from the planet “Zygot”.

He can read and write the English language as used in the U.S.

He does not know any slang terms whatsoever such as IRS terms, DOL terms, payroll terms or company lingo

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Who Is Your Alien?


Actually can be anything from a stuffed Panda to a Ninja Turtle

Makes the work seem lighter

Helps bond the group

Everyone is in on creating it

Symbol of who is working on procedures

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Examples of Using Slang…


“He does not know any slang terms whatsoever such as IRS terms, DOL terms, payroll terms or company lingo”

Your company calls a new hire form EHF’s. This is short for Employee Hire Form. Everyone in the company knows this term. However, a new person in training may not. That is why you cannot use it in procedures until you have first explained the term.

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Using Payroll Terms and Jargon…


“He does not know any slang terms whatsoever such as IRS terms, DOL terms, payroll terms or company lingo”

You cannot use any term until it is explained

No matter how simple or basic

Do not assume the person using the procedures understands anything unless you tell them

Forces you to keep things simple!

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More Characteristics for Zot…


Sounds strange but these characteristics will help you write better procedures…

Cannot go backwards when reading

Cannot turn pages backward

Can use a computer

Can refer to a system’s manual

Can refer to a company policy manual

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How Does This Affect Writing the Procedures?


If you keep him in mind, you cannot write any procedure and take short cuts by saying something like “refer to page 13 on how to do this part”, or “Go back to step two”.

You must write out each part completely each time.

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Can Use Other Manuals…


You can refer to your system’s manual when required

You can refer to company policy manuals when required

No need to rewrite in the procedure manual

Unless of course, you don’t have these manuals! Then you must include the instructions as well.

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Develop For Your Needs


Should always have the attributes we just discussed

After that can develop in any way that fits your department’s needs

If you never hire anyone without at least one year of payroll experience then give that knowledge to your alien

Always the lowest level never the highest!

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What Would Your Alien Have?


Number of years in payroll

CPP/FPC

Certain Payroll Systems

Certain Timekeeping Systems

Other Computer Skills

Other Skills

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Actually Begin the Writing…


Start after developing Your “Zot” as you need him

Make a list? Or…

Dig right in?

Whichever works for you

Get the whole staff in on it

Again—great for training and cross training

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Making a List…


Some prefer to make a list of all the procedures they will need

Then pick a procedures, any procedure and get started

What procedures do you need?

The list should include everything you do in the department, no matter how small…

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Remember Zot…


Would he know it needed to be done or how to do it if you didn’t write the procedure for it?

This is your basic starting point

Let’s look at a basic procedure list. What three items would you include?

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Sample Procedure List


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How many picked these topics?

Or Just Dig Right In…


Some prefer to just pick a topic they know they do need and just get started. Then as they write several procedures start the organizing.

Either way will work, but you must eventually have a list done.

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Don’t Reinvent the Wheel…


Have any old procedures lying around?

They could be a good starting point.

No matter how old

Then go to performing the task.

Make sure they still apply for the “rules”

May have to update the writing style

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Before Starting the Writing…


Gather all management policies, laws, rules and regulations as well accepted practices for each of the procedures first before beginning to write.

Review the laws and policies first.

May find noncompliance issues you didn’t know existed.

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Where to Start?...


Just pick a procedure and go

It doesn’t matter at this point what order they are done in

Remember, each procedure is independent of each other so they can be written in any order, at any time

Will be put together later in the manual

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Getting It Down To Size…


Procedures need to be manageable so keep it small

No more than 10 distinct steps to each procedure (not including processing on system)

If bigger, then split the procedure into two or more

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Example…


A good example is garnishments. You will need to break it down by type of garnishment first. Let’s look at child support. You may want to break that down further by having a procedure that explains how to process a support order with arrears and one without.

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Now Your List May Look Like


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Now

“Garnishments” on

the previous list

would look like this

Another Example…


Direct deposit is another example. You will want a procedure for setting up new direct deposits, one for changing an existing direct deposit, one for employees who have both checking and savings being direct deposited and one for canceling a direct deposit already in effect.

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Now Your List May Look Like


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“Direct Deposit ”

on our previous

list would

increase to these

items

The Basics


The five basics elements of what is needed in a procedure include:

Number Title Purpose When to use Steps

Note: Screen prints, examples, samples all come after the basic procedure is completed—some will need, some won’t

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Let’s Do An Example


Our procedure list includes auditing the Form W-4 when it is received by the payroll department

Over the next slides we will review the five basic elements of a procedure and use the Auditing the Form W-4 as an example demonstration for each element.

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Number and Title


Helps when pulling together

Numbering may need to wait until all are completed—not cast in stone

Company may have master numbering system

Our Example: Procedure Number: A1107 Procedure Title: Form W-4 Auditing

Make sure title

is easy to use

to identify the

purpose

ZOT SPOT

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Purpose of Procedure


Need to know why the procedure is needed. What is its purpose?

Helps define payroll department as well

Maybe it isn’t needed after all?

Not uncommon to discover outdated or unneeded procedures during this process

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ZOT

SPOT!

Make sure

purpose is

clear

Purpose of Procedure


Our Example:

To ensure accuracy of payroll data and to maintain compliance with all appropriate federal and state regulations, each Form W-4 received into the payroll department must be audited. The purpose of this audit is to verify that the form is completed properly by the employee and is in compliance with all IRS and state equivalent regulations.

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When to Use the Procedure


When would someone in the payroll department need or be required to use this procedure?

Our Example:

This procedure is used whenever a Form W-4 is received by the payroll department.

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ZOT SPOT!

Remember I am unfamiliar

with your payroll

department. I need to

know how to apply the

procedure so I use it

correctly.

Exceptions?


Are there exceptions to the use of this procedure?

If there are times when this procedure can’t be used—tell me now.

Our Examples:

• Do not use this procedure to audit the state equivalent tax forms. See individual procedure for appropriate state and form.

• Do not use this procedure to audit Form W-4 for nonresident alien* employees. See procedure A1108.

Make sure I

know when

NOT to use

* Does this mean me??

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Then the Actual Steps


ONE MORE TIME– No more than 10 or 11 full steps

Don’t “fudge” and combine 5 steps into one

But you can and usually do have steps within one step

Example: Step One Audit

Sub-steps what to audit

If you have more then break up the procedure

Let’s examine how to do the steps

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Write It for the Customers as Well


Many times writing procedures includes explaining how to do it for your customers such as employees as well as payroll staff

Can write both at the same time

Basic English with no numbering etc.

Explain exactly what you want them to do in simple steps

Form W-4 is good example

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Words to Paper…


Never write a procedure from scratch while actually performing the task

Just slows down your daily work

Actually takes longer to write the procedures

Don’t do it even if you do multitask

Causes you to skips steps

Your mind works faster than your hand

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But…


Never write procedures strictly from memory either

Leave out critical details that you always remember to do, when you are doing it

If I can’t write while doing it and I can’t write from

memory then what is left????

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Combine the Two…


Write down the steps to the procedure you want to document

Do strictly from memory

Put down everything you can think of in the order you remember

Don’t leave anything out no matter how small a step

Use easy, simple language

Try using flow chart

ZOT SPOT!

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Combining the Two…


Remember these are procedures not “War and Peace” don’t keep working the wording at this point

No researching or looking things up

That’s why you read it before starting the writing

You have 20 minutes no more!

Set an alarm if you have to!

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Writer’s Block…


These are not “original works” you can use other “sources”

Example: for the purpose of the procedure for the Form W-4 use the one on the IRS website to get you started

You can clean up and improve later

You can get it off the “internet”

Not a college paper – do not have to annotate or cite—no checking for plagiarism here

Yes, you can use other “people’s” procedures

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Next Time You Perform the Task…


Take your procedures and try to use them

Follow to the letter as you wrote them

Don’t add steps or do anything that is not written in the procedures

Don’t be surprised by what is left out or wrong -- it will happen

Make the notations, update the procedures with your notes and then put it aside

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Keep It Going…


Do the last step several times

Remember writing procedures is not a quick process, especially when it gets to this point.

Testing does take time

But once you get one procedure done, it will begin to go quickly because you will begin to leave fewer things out the first time

Always keep Zot in mind

Do a review of the “rules” as you go along

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When You Think You Are Ready…


Give your procedures to another person in payroll

Let them perform the task using only the procedures

They cannot add or subtract anything

Both of you must agree they are accurate

Settle ALL disputes first before moving on!

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This is Where Disputes Will Arise…


Don’t be surprised if the other person does the task differently

This happens, especially in large departments

Actually its one of the reasons for writing the procedures in the first place

May need a third party mediator!

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What If You Are Solo?


Give your procedures to your backup

Try your boss!

Another set of eyes is essential before casting the procedures in stone

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Now For the Non-Payroll Test…


When you are completely satisfied with your procedures, give them to a non-payroll person to read. Did you use any terms not explained? Are they easy to understand even to the “lay” person?

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Not the End of the Process…


Now that the written procedures are complete you need to add the finishing touches for each procedure

Add screen prints where needed

Add samples and examples

Add copies of forms where needed

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Example…


You have written the procedures for process a Form W-4 for your department. You should now include:

1. A copy of the form itself

2. Samples of how the form should be completed

ZOT SPOT!

Don’t assume

everyone knows

what the form

looks like in

their memory

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Putting It All Together…


Once all the procedures on the list are written they need to go into a manual

Number each one

Order of processing is usually good

Section for each procedure type may work best

Table of contents is needed

ZOT SPOT!

Make the table

of contents

easy for anyone

to find anything

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Some Q and A That Always Comes Up…


Long Hand or computer?—always your choice

Paper or electronic?—I like both to accommodate all employee needs but make sure they don’t make “corrections” on the paper

Dating the pages?—Date created and by whom, then date updated/reviewed and by whom

Updating the procedures?—minimum annually, that’s why use forms

How long will this take? Only Zot Knows!

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A Few Tips to Speed it Up


If you have a “playground” to use on your system, use that to test procedures that require a “time frame” to use such as “quarter-end” or “year-end”

If not, write the steps for those “time frame” procedures ahead of schedule and have them ready to go when the time comes

Build in the time to employee’s normal day if possible rather than catch as catch can

Create “Procedure Day”

Try flowcharting the procedures first

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Are There Any Questions?


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How Can Ascentis Help Me?

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Ascentis Payroll and Employee Self Service includes W-2 and W-4 forms that can be downloaded with sample employee data and used for completed sample forms when writing payroll procedures.

• Since employee data is never purged from the system, you have a wealth of data to use for example purposes.

• Payroll and ESS administrators can view and download employee and employer W-2 forms with form totals based on the employee sort you choose at year end.

• Employees and ESS administrators can view and download employee Federal W-4 forms.

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