Roll reversal: the payroll function has come a long, long way over the past decade. Cathy Hayward explains how specialists in the field have evolved from number-crunching administrators to sought-after strategists.

Author:Hayward, Cathy
Position:Payroll Management

Ten years ago the payroll manager would sit alone in his office keying employee data into the system and preparing for the monthly grind of processing the payroll. His only contact with the rest of the organisation would occur when he handed out the payslips and waited for the inevitable complaints about mistakes. Today's payroll managers are unlikely to be found slaving over a hot payslip-printing machine. Instead, they might be in a board meeting discussing a report they have produced on "rightsizing", talking to the HR department about absence management or attending an Inland Revenue seminar on the latest changes to payroll legislation.

The role of the payroll manager has been transformed over the past decade from a poorly paid, admin-focused job to a well-respected, strategic role commanding a much better salary. "When I started out in payroll it was a very manual, time-consuming process that was stuck on its own and not a particularly exciting place to be," says Francis Plum, finance director at Albany Software. "Now it's a far more complex, strategic and interesting area to work in--one that has a real impact on the business."

The Inland Revenue has played a key role in this shift. In the past the only legislation that affected the payroll department was income tax and national insurance. Over the past few years, however, the government has bombarded payroll with legislative changes and extra responsibilities. The introduction of student loans, statutory sick pay, working families tax credit, paid adoption leave, paternity leave and the minimum wage; and changes to maternity pay, company car taxation, the use of private vehicles on business, pensions contributions and the working time regulations has made the job so much more complex.

"There was no change in legislation for years," says Debbie Monk, payroll product manager at Microsoft Great Plains. "Statutory maternity pay was introduced more than two decades ago and then there was a major gap until 1998, when there were sweeping changes. The government is putting more onus on the payroll manager to collect money from employees and to absorb the associated administrative costs."

Not all of these additions have been welcome. "Tax credits have no place in payroll," argues Sue Levett, payroll manager at Access Accounting. "The government wants people to get these benefits in their pay packets and is relying on the employer to pay the costs of doing so."

All of this is making the...

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