Intelligent Automation Benefits Payroll Costs, Compliance

Intelligent automation of the payroll process has numerous benefits to efficiency and costs, a consultant said March 21.

Automation should be thought of as a straight-through process and should be considered holistically, as the term “intelligent automation” can include robotic process automation as well as AI, Matthew Busanic, a director of global payroll and human capital advisory at KPMG, said.

Mapping out payroll processes can allow a business to determine at what steps technology might be useful, Busanic said.

Busanic spoke at the American Payroll Association’s Capital Summit in Arlington, Virginia.

Areas where intelligent automation can be valuable include cost savings and transparency, Busanic said.

Busanic cited statistics saying that intelligent automation can result in savings of 10% to 60%, but “usually the sweet spot is 35 to 40 percent,” he said. “That’s tricky because it depends on how you manage your costs,” he added.

As regards transparency, most Capital Summit attendees indicated that they had to teach external or internal auditors about payroll, while instead automation can be used to create audits, Busanic said.

Busanic also asked attendees if they knew what their payroll costs were per employee per month or per employee per pay period, and added that intelligent automation can be used to maintain a full view of payroll costs “today, next pay cycle, next month, six months ago.”

Automated systems can be very flexible “if I have a change, because my workflow changed, or I have a new wage type,” Busanic said.

It may take some time to learn the technology, but “it’s something that can be quickly adjusted to best support your payroll operations and your payroll function, which includes your upstream and downstream partners,” Busanic said.

Busanic also emphasized that reconciliations are the easiest part of the process to automate.

Adjustments, Improvements, Employee Data

Busanic cited a client that approved a country profile for Spain from a vendor, where overtime pay varies in how it is taxed, but ended up receiving penalties because the vendor taxed overtime pay incorrectly.

“If you have automation controls in place, you can mitigate that at the time it occurs or even before that,” Busanic said.

Citing that example, Busanic said that keeping up with obligations and compliance is one of his favorite areas for the expansion of automation.

Busanic credited technology with helping him improve in his own experiences as a payroll practitioner, where he was responsible for paying employees in 28 countries. He had difficulty determining the hours for which premium pay was required and did not know his cost of operations, he said, adding that automated reports could help tell him where he had problems upcoming based on quarterly data.

Busanic also said that onboarding is one of the biggest uses of automation, but that many businesses still do not have automated onboarding.

Regarding employee data, many vendors and technology systems process time adjustments very well, but automation can help employees provide better data, Busanic said. He added several times that employees themselves are the best source of employee data.

Automation affects all employees in the payroll department and the business, and those seeking to automate payroll should know how it affects other employees, Busanic said. “It’s more than automating your payroll calculator,” he said.

Busanic said that the most effective uses of automation align with business objectives and that the same solution will not work for everybody. “Always look at it where it benefits you as a payroll leader,” he said.

“When you’re putting in any intelligent automation program, you’re always thinking of the experience of your customers,” Busanic said. “Your customers are HR, business, the employees, finance, treasury, your legal jurisdictions,” he said.

“You don’t need to go big, you need to go purposeful for your function, your challenges, your organization,” Busanic said.