Learn How—and Why—to Write Clear, Concise Procedures Anyone Can Understand
Just like every other department in your business, payroll needs its own set of written operating procedures (payroll procedures) – and yet of all departments in a business, it’s most likely that payroll has not completed its work, says Vicki Lambert, president of The Payroll Advisor.
Payroll: Your Star Department—Assuming It Works Smoothly
When a business is small, the owner can handle payroll. But when a company expands, those reins will likely be handed off. That’s when written procedures become critical.
What those procedures are and how they are compiled are two different beasts, however.
As far as what they contain, the Houston Chronicle laid out the minimum requirements:
- Describe how employees document and submit their time
- Explain how employee wages are calculated
- Include how to make adjustments to time or wages
- Clarify the payment schedule
- Define how checks are printed or funds are deposited into bank accounts
- Spell out how records are kept—and for how long they are kept (the Internal Revenue Service suggests keeping employee payment records for at least three years)
The Real-World Meaning of On-Paper Requirements
Deciding what the procedures should include is the easy part, Lambert said. Writing them so that other employees can understand what’s to be done is another issue altogether.
In her book, “Payroll: A Guide to Running an Efficient Department,” Lambert says that the technical nature of payroll can make it difficult to write good, easy-to-follow, and accurate procedures. Procedures should be explained in plain and simple English so that someone without a payroll background can understand them.
“This sounds easy enough, but it is actually difficult, as payroll is a very technical field and each task usually involves multiple steps,” Lambert wrote. “In addition, the person writing the procedures usually has vast knowledge and experience in payroll and it is sometimes difficult for an experienced person to break the direction down to their most basic level.”
In particular, avoid slang and jargon, and spell out abbreviations, Lambert recommends.
“Basically, you cannot assume that the person reading and using the procedures understands anything unless you explain it first,” she writes.
4 Writing Tricks from the Pros
Payroll is much easier said than done, pros agree, but there are some specific techniques to follow. Forbes suggested:
- Unless your business actually is a payroll business, you probably need help. The IRS has good incentives for getting things right: large penalties.
- Keep a running profit and loss statement, which helps with taxes and budgeting.
- Make regular federal tax deposits to ensure payroll taxes are applied correctly.
- Keep a second business bank account and use it only for payroll.
The final hurdle, says Lambert, is finding the time to actually do the writing. Her payroll writing tricks include: setting time limits, dividing the work into manageable chunks, and using the procedure writing process to clean up any “bad habits” which may have crept into the office over time. The bottom line, she says, is that crafting a good set of written payroll policies can streamline your business and offer a positive learning experience.
(This post first appeared in a ProfEd blog)
By Jeff S on 12th February 2018