Pare down the time Payroll needs to close the month
September 30, 2008 by Jennifer AzaraPosted in: Communication tips, Cost cutters, Efficiency, In this week's e-newsletter, Latest news & views, Management issues
Managers not getting the numbers they need to close the books fast enough? Look no further than this department.
So you’ve already plucked all the “low-hanging fruit” when it comes to speeding the month-end close.
Question for you: How long does it take to close payroll?
Your answer is how much you stand to save off month-end if you try this admittedly radical efficiency booster.
Think about closing payroll a week early. One look at your historical pay data will tell you if it’s a viable option for your organization.
The overtime issue
If your base payroll doesn’t vary tremendously from pay period to pay period, you’re a prime candidate. Even if you have swings in overtime, you can probably predict that relatively reliably over a year’s time.
How it works: Each month, you’d close payroll a week early, using estimates for one week’s overtime for financial statements.
Yes, it may take some out of their comfort zones.
But the payoff you stand to see in terms of a faster close may make it a change well worth getting used to.
Tags: Comfort zone, Financial statements, overtime, Payroll, Tuesday
October 6th, 2008 at 2:59 pm
I happen to be the payroll manager of our company, and believe me, payroll has never been the hangup for getting month end numbers out in a timely fashion. My payroll numbers are always entered by the last day of the month, and usually earlier, depending on when the last hourly payroll was. On the first day of the month, I do all my payroll accruals, so nothing is ever waiting on our payroll.
October 7th, 2008 at 11:19 am
Payroll here is always the first department to close, before AP and AR. We have to keep the payroll moving. We can’t afford to wait a week before posting our numbers because that holds up the next week’s numbers.