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WHY NOW IS THE RIGHT TIME TO RESTRATEGISE YOUR PAYROLL

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Steven Watmore, Product Manager, Sage UKI

 

National Payroll Week – admittedly it’s not an awareness week on everybody’s radar. But for payroll professionals, and those in the know, it’s a time to reflect on the changes a year has wrought on the industry. It also provides with the chance to showcase the crucial roles our professionals play in paying the nation.

During the past 18 months, payroll has seen some huge shifts due to the turbulence created by the pandemic, and this has also shone a light on the importance of our payroll experts and the complex job they juggle.

Running from 6th to 10th September, National Payroll Week can be treated as a checkpoint for business leaders to access their own payroll strategies.

Payroll is not just about finances – it’s part of a wider wellbeing issue. And, just as three out of four (72%) HR leaders say the crisis has helped them demonstrate their value and increase understanding of HR’s role, according to Sage research, there is an opportunity for payroll teams to show their value and understanding of the intersection between payroll, job satisfaction, security and morale.

Steven Watmore

Through a company payroll audit, wellbeing and efficiency questions can be raised and tackled. Are there inefficiencies in current payroll? Are staff happy with the way they receive pay? Could investment in digital payroll services boost satisfaction? With these themes in mind, I’m going to focus on three top tips to take your payroll to the next level and meet employee needs head on.

 

  1. Initiate pulse surveys to assess payroll satisfaction

Historically, payroll has appeared to happen by magic and very much behind the scenes. But in the wake of the furlough scheme implementation, and the lifeline this has extended to workers across the country, payroll has gained new visibility as well as complexity.

Payroll now is part of a wider HR conversation. There’s a myriad of demands that align to wellbeing, since getting payroll right is vital for staff to pay for living costs, such as rent, mortgage and bills.

A pulse survey might cast out some insights into how employees are handling the pandemic. Payroll could be a vital piece of the puzzle here, given that the past year has been full of trial and tribulation for many of us, especially where finance is concerned. According to FlexEarn, three quarters (77%) of employees say that money worries impact them at work, so it’s important to explore ways that payroll can help alleviate financial stress for workers in ways like this. Something like Earned Wage Access, which lets staff utilise earned segments of salary in real-time before monthly payrolls, can help manage paying for living costs, especially unexpected expenditure.

 

  1. Audit payroll processes to root out inefficiencies

It’s easy to get overwhelmed by payroll. You need to pay staff, maintain codes of practice and manage cashflow. An emerging challenge is now keeping a handle on time worked as basic or overtime, as there is new fluidity in hours, with temporary workers and churn in companies – as part of a move washing over industries, dubbed the ‘Great Resignation’. An opportunity for businesses is to make sure they’re taking advantage of any government support they may be entitled to. Two good examples to look at is the Employment Allowance and Small Employer’s Relief.

Balancing compliance with needs for flexible payroll and emergency cashflow measures, such as freezing pay and recruitment if sales plummet, which was a challenge facing many during lockdown restrictions, places huge pressure on payroll teams.

All these moving parts paint a picture of disruption. There might be a lot of intricate nuts and bolts in the back office, but as long as you are delivering a successful, regular payroll service to clients or staff, then this is what will be intrinsic to wellbeing. To do this, you don’t necessarily need to supercharge productivity right away, but assessing where time is trapped, and thinking about how automation can save human effort, could prove helpful first steps.

 

  1. Check whether your software is up to speed with compliance

Managing payroll can be complex. It involves knowing tax compliance, by keeping track of updates from HMRC, ensuring that payroll is synchronised with benefits packages and pension schemes, and that workers are paid like clockwork.

For instance, one of the key changes in this tax year was around National Minimum Wage. Previously, people aged 21-to-24 were in the second wage tier, but this year those aged 23 and up will move into the top band. That could impact costs, so it’s worth reviewing the rates to understand how your business is affected.

With the right software and support, you can enact procedures at lightning-fast speed and keep yourself financially agile when circumstances switch. Updates are automatic through cloud-based platforms, so you don’t have to stress about whether your system covers the latest regulations. Having the right software can align to employee needs too, as many are clamouring for digital, mobile solutions, such as online payslips or app accessibility, which can be offered through the right payroll platform.

 

The road ahead 

A step-by-step approach to evaluation, with an employee pulse survey, technology efficiency audit for the payroll team and compliance check can keep the payroll machine running smoothly. Ensuring payroll is healthy is very important. Payroll is the unsung hero of the economy, the essential gear that makes the engine turn, and with the rollout of the furlough scheme it has proved an essential prop to industries as they weather the storm.

As business goes digital, payroll professionals need to ensure they continue to upskill and update technology to remain at the top of the curve. Companies need make sure they invest in their payroll teams and give them time to learn and upskill, while also staying ahead of technology demands.

Data analysis and flexible payment schedules are changing the way payroll works, while employee needs and individual company requirements now play an increasingly central role in payroll management. Our payroll professionals have to be so much more than simply payslip processors as businesses look to glean more from this department, maintain great employee engagement and use deep data insight to develop their operations.

 

Business

THE EVOLVING TECHNOLOGY NEEDS OF THE FINANCE DEPARTMENT

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Jennifer Sims, Senior Consultant at Xledger

 

The world of finance software is evolving quickly, but with many new software contenders entering the market it can be a mindfield for organisations. Many finance teams are already using multiple accounting apps and software packages for bookkeeping, payroll and invoicing to service individual needs. Whilst it may work fine for now, this segregated approach isn’t sustainable for long-term growth. The world is swiftly moving to agile, automated ways of working. As a result, there is a growing need to choose suppliers that can fulfil multiple functionalities within the one platform.

Financial software is evolving at such a pace that it can be difficult to keep up. Changing up a finance solution is a big step and ease of migration can be a substantial factor in determining which solution provider to go with. But how do you choose a solution that will grow with your business and still offer something innovative in five or ten years down the line? The fear is always that non-techie organisations will end up falling behind, but in such a highly concentrated industry, how do you decide which solution would work best for you?

 

Cloud-first: the term that makes all the difference 

You could find a ‘cloud-based’ service with an application that comes with automated audit trails to make it easier to meet compliance and record-keeping obligations, for example. But for a solution to offer all of the many future benefits promised by the cloud, it needs to have been built specifically for a cloud environemt from the outset – ie. not an on-premise built system that has been later adapted. Cloud-first services (true cloud) were always intended to leverage economies of scale, cope with live updates, be accessible from anywhere with an internet connection, and to scale rapidly, to name just a few of the many benefits.

When we talk about innovation in financial technology, we’re not just talking about software that makes it easier for the financial controller to create reports. If eliminating reliance on Excel spreadsheets is the only tangible benefit you have to really shout about, you are missing out on the real deal. With ‘true’ cloud finance software the sky is the limit.

Finance and accounting technology needs to directly meet the needs of the finance function and support the wider business needs.  When looking at accounting software platforms you’d be hard pressed to find one that doesn’t now promise ‘cloud-based’ enterprise resource planning (ERP) capabilities. The cloud is nothing new, but it’s the way that a solution harnesses this environment that makes a real difference. And here is where there is a need to read between the lines.

 

Automate more with true cloud 

Historically, repetitive and manual tasks are typical of the finance role – from invoice postings to expense claims handling – these can overwhelm the finance team. Research by Xledger[1] has found that an enormous 91% of CFOs and finance decision makers are carrying out at least one of these repetitive tasks as part of their job. What’s more, senior finance leads are averaging a whopping 25 hours per week carrying out repetitive and manual tasks, compared with 15 hours for other finance decision makers.

A modern, true cloud finance system can enable your business to automate repetitive tasks and provide one source of truth so that teams can make informed business decisions that will help to scale a business. Bank reconciliation, dashboard creation and reporting are just some of the tasks that can be handled automatically.These capabilities are aiding overtasked finance teams and saving hundreds or thousands of hours a year.

Whilst different companies are at different stages in their digital transformation what is clear is keeping up with the latest technology is fundamental to the future success of an organisation.

Xledger is a true cloud finance solution. The basics include invoicing, robust general ledger accounting, detailed slice and dice reporting, purchase orders, billing, VAT reporting, and cash and bank payments. It also adds process and structure to the enterprise with procurement and inventory, budgeting and forecasting, and project accounting. Users are always on the latest version of the software and with regulation more stringent than ever today, Xledger is ISO 27001 accredited.

Choosing the right provider for your financial ERP solution comes down to whether it has the fundamentals right. When hosting all of your vital data in the providers’ own servers, it should evidence a highly tested security process that comes with backup services as standard.

As our demand for technology capabilities grows and as ERP models progress, innovation will become the structure for growth – and there is no end to the possibilities.

 

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HOW RETURNS ABUSE AFFECTS RETAILERS

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By Aaron Begner, EMEA GM at Forter

 

Accompanying the significant growth in ecommerce over the past 12 months, is the need for retailers to manage the impact of a growing array of fraud and abuse challenges. One type of fraud that can easily fly under the radar is the abuse of a merchant’s returns policies.

Returns abuse can be difficult to detect and prevent for retailers, as often it is a challenge to identify fraudulent behaviour vs. a ‘usually-good’ consumer trying to bend – but not break – return policies. Therefore, it’s often a challenge to identify how returns abuse actually affects retailers. Here are three of the biggest ways that returns abuse negatively impacts business.

 

Lost Revenue

The most obvious effect that returns abuse has on a business is lost revenue, which can be significant. Research indicates that returns abuse may be costing retailers up to $15 billion per year. When fraudsters purchase items with the intent of abusing returns policies, the retailer makes no profit. Furthermore, it stops legitimate customers from purchasing the items they want, as fraudsters who don’t want the items are moving them around.

Various types of returns abuse can profoundly damage retailers’ bottom lines. Some tactics, such as shoplisting, where fraudsters try to obtain a refund for a list of products listed on a perfectly valid receipt, yet that they never purchased to begin with, can significantly impact retailers’ bottom line.

 

Increased Operational Costs

Returns abuse doesn’t only affect revenue pertaining to the products themselves. There are also operational costs to consider. An increase in returns abuse will often lead to more consideration being put into checking every return, for signs of abuse taking place. This can range from missing tags to damage or wear on the product. This process can be time-consuming, meaning more resources might be necessary to continue operating in an efficient manner. Handling and warehousing costs can also begin to increase, with returned items becoming significantly less valuable.

 

A Poor Customer Experience

As returns abuse continues to increase, many retailers will feel pressure to tighten their return policies. This could range from reducing the allotted time for eligible returns, to only issuing store credit instead of cashback. In some cases, more extreme measures such as requiring a restocking fee for more expensive merchandise will be taken.

While these are all effective ways to help diminish the effect of returns abuse on retailers, they can also have an adverse effect on a retailer’s customer experience. If loyal customers have become accustomed to a more flexible and forgiving return policy, they could be taken by surprise when it’s more difficult for them to return their items.

Ultimately, it can be tricky to balance the two. Returns abuse negatively affects retailer revenue and the overall business, but so does a poor customer experience.

 

The Negative Impact of Returns Abuse Cannot Be Understated

Returns abuse is often overlooked. It can be difficult to detect, but significantly impacts revenue and operations. Because stricter return policies may restrict loyal customers, the reputation of a retailer’s business can be affected. Poor customer experiences can lead to bad reviews and a loss of current and potential customers. Because of this, returns abuse prevention should be a top priority for all retailers.

With this information in hand, retailers can get a better understanding of how returns abuse affects their business and why they need to put a prevention plan in place, as soon as possible.

 

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