Jon Augdahl from the Boyer & Associates staff recently implemented in-house payroll in Dynamics SL for a large client with more than 2,000 employees. Implementing a payroll module can be tricky if it’s not correctly, fortunately this was a quick implementation that was completed in just a couple of months., We wanted to share a few things that Jon learned, and some tips that might help you if you decide to implement an in-house payroll system:
1. Staff – make sure that you have adequate staff to get you through the first month or two on the new system, and the last month on the old system. Payroll is the one module where making mistakes can be catastrophic. There will be many changes during a payroll implementation. Data entry screens will be different, master records and maintenance of those master records will be different. The process itself will be different. These changes alone will probably mean that the payroll staff will be putting in a few extra hours during and right after the go-live date. Communicate this change and listen to the staff. If you choose a go-live date that is aggressive, make sure you have a backup plan for staffing.
2. Change Management – if you’re considering changing to a new system, there is probably a reason. Sometimes it is financial. Sometimes it is just logical. Sometimes systems force change. Whatever the reason, make sure that you have a plan for communicating that change, what that change is going to mean not only to the payroll staff, but to the employees, and to the management of your organization. Normally there will not be any change to the employees getting payroll checks or EFT payments, but it is still a good idea to communicate to the employees that a change is going to happen. Include a reason why you are changing when communicating. A payroll check is a very personal thing, and changing anything about when or how calculations are made can make employees nervous. Every payroll system calculates things a little differently, so make sure you communicate to the employees about rounding, and about anything else that “might” change on their payroll check.
It is also very important to have consistent communication to and from management. If management has agreed that this change should occur, make sure that management communicates in a positive manner to all employees. The last thing that a payroll department needs after a go-live is to get bombarded from employees with complaints.
3. Data Conversion / Migration – this is the biggest part of implementing a new payroll system. Determining how to configure the new payroll system is the fun part, and probably the easy part of implementing. The messy and hard part is converting the data from the old system to the new system. All payroll systems are not created equal, so just because you might have earnings codes set up one way in your “legacy” system, doesn’t necessarily mean that you will want to set them up the same way in the new system. The same is true with deductions, taxes and benefits. Make sure you have a plan for how you are going to get data out of your “legacy” system, and what rules you need to apply to that data to get it into a format that you can use to import into your new system. Start working on this early in the implementation because you don’t want to run into conversion “gotchas” the day before going live.
4. Data Conversion (part ) – If you are converting to a new payroll system at any other time besides January 1, we would advise you to import your Quarter to Date and Month to Date information for the current year prior to going live, if at all possible. During the implementation described above, we did not do that. We ended up importing the first three quarters of 2012 payroll data in January of 2013, just in time to get the 941s and the W2s printed and sent. This did work, but we ended up having two stressful moments during the implementation, and that could have been avoided if we had imported the first three quarters at the go-live.
5. Configuration – If all organizations were startups, configuration would be pretty easy, because you could set up everything in payroll exactly the way you want to set it up without even thinking about how you are going to get the data that you need from your legacy system. Since most organizations are not startups, and data conversion must be considered, configuration is not always easy. That being said, I do recommend setting up the new system to take advantage of new features and functionality that your legacy system might not have had. Consider data entry, processing, and reporting and analytics with all of the decisions that you make during configuration. This is a great time to “fix” bad habits and broken processes.
We hope these tips are helpful to you. Should you have additional questions or would like to talk more about your Payroll options, feel free to contact us as we’d be happy to help.