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3 Insider Best Practices for Payroll Implementation

Aug 17, 2017  | Tag: Implementation

During my career, I’ve worked on both sides of payroll, as client and as provider, and I’ve seen how an organization’s approach to implementation can greatly influence the future success of their payroll system, whether positively or negatively. The following three best practices will help you start your payroll transformation off right and stay on track to achieve your goals.

1. Start simple.

The easiest decision you can make to help your implementation run smoothly is to begin with your simplest payroll. Any implementation brings with it new terminology, documentation, and tools, which means that in addition to changing your payroll vendor, and likely your process to some extent, your team must learn a fully new system.

For example, customers new to CloudPay may wonder: What does GPA mean? What’s a PSQ? How does Document Manager work? Our implementation process is designed to bring them along that learning journey in a clear, constructive way. However, because it’s new information to learn, it takes additional time and effort. By choosing a simpler payroll to implement as they’re learning the system, customers can ease the workload a bit.

In this context, “simple” doesn’t necessarily refer to country complexity, although there are countries like the UAE that are naturally simpler because there isn’t a payroll tax in place. The key is to choose a payroll that is simple for you, whether it’s because the team knows it inside out, you have easy access to the data, it’s in your native language, or perhaps it’s a salaried population.

By beginning with a manageable payroll, you set up your team for success. And once you have that payroll up and running, people are motivated. You’ve met your deadlines in the time you wanted and are ready to do it again.

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2. Avoid the big bang.

One of the great things about the CloudPay implementation methodology is that it’s repeatable, meaning that you follow the same steps in the same stages with each country you implement. So once customers have learned the system on their simpler payrolls, the implementation process is understood and easy to follow for more challenging payrolls.

An important factor in maintaining that manageability, however, is properly scheduling implementation projects so that deadlines and requirements don’t compound and overwhelm your team. Because the method repeats, if you put every project on the same time scale, when item A is due in project one it will also be due in project two, and three, and four, and so on, at exactly the same time.

The key to avoiding this big bang of deadlines and information is good resource management. The question really is how much can your team handle? If you have plenty of resources, maybe you can complete several projects on the same schedule without issue. If you’re a smaller team, however, you’re going to feel the strain.

Throughout implementation, there are peaks and troughs in terms of the information customers need to supply. When it’s time to set up a parallel run, for example, we need all the relevant data to do a test run. If a customer has 20 payrolls within three to five days of each other, we're going to be asking for 20 lots of input around the same time—which will also be the time the customer is running those live 20 payrolls on their current systems.

This raises the risk of project slippage. If the customer with 20 payrolls has to deliver all the data for the parallel run on Monday, what happens if they miss? Will they be able to complete everything on Tuesday? By thoughtfully scheduling their implementation projects according to the resources available, that customer can do a lot at the start to support their success.

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3. Choose your time of year wisely.

Taking a holistic view of your global payroll needs, pressures, and requirements is always smart, and it’s especially helpful for timing implementation. It’s typical for organizations to want to start a new year on the new system, but depending on your payroll specifics, a clean year-end switch may be more work than it’s worth.

For example, in Western Europe it’s common for companies to pay early in December to accommodate the Christmas period. In payroll terms, we would call December a short month, meaning customers are trying to get everything done in less time than a standard month.

So if an average Western European customer is considering a January go-live, it means they would be putting implementation and all its challenges on the back of a short month. Now, in addition to the normal stress of running payroll, they’re managing regular year-end activities, Christmas and New Year holidays, process change, and a major system implementation all at once.

To further complicate things, during implementation, we most often do a parallel run of the period just before go-live. Monthly payrolls are normal in Western Europe, so to launch in January in the Netherlands, for example, we would do a complete parallel run in December.

To run the payroll correctly for December, CloudPay would need all of the customer’s year-to-date information for all prior pay periods to ensure deductions and taxes are calculated correctly in December. This means the customer must provide complete January to November information, which we would have to build into the scenario solely to facilitate the parallel run in December. At the end of it all, the customer will get the clean switch at the start of the tax year, but it would take much more time and effort to get things set up.

For smaller teams or organizations, the neat year-end switch may not be worth it. For example, if that same customer decided to start the process in January, we would need only one month of data. In February, we'd do a parallel run, they'd go live in March, and that one-quarter shift would have significantly reduced the amount of information and effort required to go live.

Implementation doesn’t have to be a difficult process. Done well, it can empower your team, your organization, and your payroll. Keeping these three best practices in mind can help you begin your payroll transformation in a positive way and keep momentum building, project after project.


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