While many South African citizens would agree that payroll measures are put in place to prevent or detect fraud, this is not the most important reason to ensure that a company has proper controls and frameworks, South African Payroll Association (SAPA) board chairperson Arlene Leggat points out.

Speakers at SAPA’s annual conference, which took place across three South African cities, further highlighted why companies needed to ensure that they have the correct measures in place. Leggat relays some of these points.

The first step of implementing these controls is to ensure that your company’s payroll complies with legislative requirements.

“We all have the same legislation to comply with,” she points out, adding that the focus would then move to what makes your organisation different - internal policies.

“Are the policies compliant and then are they being implemented as intended?”

Challenges in introducing a framework
When it comes to the implementation of a payroll framework within an organisation, Leggat points out that while the actual application shouldn’t be challenging, there are other challenges companies face that aren’t always obvious.

“There are way too many payroll departments out there who presume that the system is legislatively compliant and so it is not checked. If you can run a payroll, you should make time to ensure that it is correct,” she urges.

Time pressures are often an obstacle that payroll manager and administrators face. Leggat explains that it is hard to impose a deadline schedule, which allows time to correctly do all the checks and controls when the payroll department is not supported by a company’s human resources department, or its managers.

“There is always someone who hasn’t done what they need to do in time, and to make sure the employee is not penalised, payroll needs to try and get things processed. This makes their window for checks and controls much shorter, which then allows for errors.”

To err is human, but at what cost?
Leggat further highlights that as human intervention plays a part in any payroll environment, it will always bring about the possibility of mistakes.

“In light of the value of some payrolls, an undetected mistake could be very expensive, and that is the main reason for setting up proper payroll controls. It is to ensure that mistakes that are made within the payroll environment are picked up and corrected before they become significant payroll errors.”

Not implementing payroll controls and frameworks also poses significant risks to a business, Leggat says.

“Those risks generally do not involve fraud. I have seen over payments ranging from R10 to R3-million to employees; legislative errors, which cost a pretty penny in penalties from the Department of Labour and the South African Revenue Services; losses due to lack of controls in bursary and loan structures."

"The financial loss to an organisation can be huge and that is what the controls need to mitigate. As far as non-compliance goes, one runs the risk of setting a precedent and facing the same penalties, again.”

“As far as controls are concerned, I think that consistency is an imperative."

"Do not rely on an external auditor to pick up any issue; run your own internal audits on a regular basis, get a payroll consultant in to work through your payroll to pick up any issues and design an internal payroll audit program that is thorough and covers all bases,” Leggat notes.

ENDS
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MEDIA CONTACT: Rosa-Mari Le Roux , 082 573 9219, [email protected], www.atthatpoint.co.za
For more information on SAPA please visit:
Website: http://www.sapayroll.co.za/
Twitter: @SAPayroll
LinkedIn: The South African Payroll Association

Payroll fulfills many roles within an organisation. Besides being responsible for employees’ compensation and ensuring that the business complies with various legislations, payroll can also drive engagement with employees.

Christelle Helling, Executive Committee Member of the South African Payroll Association (SAPA), says that payroll managers have many hats to wear within a business.
 
“Payroll is the custodian of very personal and important information within a business. We create a safe space for people to come and discuss matters relating to their salaries.

As payroll managers, we need to be empathetic and make sure we are proactively driving communication about everything from retirement policies and medical aid benefits to smarter saving, budgeting and investing,” says Helling.
 
Helping employees be smarter with their money
Many companies offer different employee benefit packages. When policies change, or new options become available to staff, it is payroll’s role to engage with workers so that they make the best decisions for themselves, their families, and their financial goals.
 
“Sometimes a simple email communication is enough to update employees, but other times payroll needs to work more closely with HR to ensure certain topics are addressed within a more appropriate platform for the target audience.

Being able to continually communicate what the company offers employees in terms of benefits is also very beneficial to the company because it serves as a live advertisement of how the business takes care of its employees,” says Helling.

Better corporate responsibility and ethics is encouraging
According to a 2018 study by LRN, provider of governance, ethics and compliance management applications and services, whether a company acts ethically is a significant factor in the average American’s willingness to work for an employer.

Their study showed that one in three employed Americans had actually left a job because they disagreed with a company’s business ethics. According to the 2016 Cone Communications Millennial Employee Engagement Study, three-quarters (76%) of Millennials would take a pay cut to work for a socially responsible company.
 
“In addition to the financial obligations that a company has towards its employees, payroll has to ensure that a company’s activities adhere to the country’s tax obligations and comply with employment legislation.

Employees don’t want to work for or engage with unethical businesses.

Payroll acts as a watchdog and if payroll can meet payroll deadlines consistently and accurately, then employees have more trust in the company’s ability to uphold its commitments to the law, society and the communities in which it operates.

A good payroll department encourages employees to work harder for a brand and it upholds the company’s reputation in the industry,” says Helling.
 
Aligning teams for better engagement
At a departmental level, payroll acts as Switzerland between the finance and the HR team. “Payroll often works very closely with the accounting department as well as the people team.

When payroll is closely aligned with these departments, engagement with employees goes up.

Ensuring all the departments use the same language and are working towards the same goals has become a core function of the payroll department,” concludes Helling.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, [email protected], www.atthatpoint.co.za  
 
For more information on SAPA please visit:
Website: http://www.sapayroll.co.za/
Twitter: @SAPayroll
LinkedIn: The South African Payroll Association