New System Offers Smaller Companies Avenue To Paperless Payroll Programs

Since the mid 1990’s, organizations have been implementing systems to improve HR services. Once the purview of only large companies, more and more small and medium-sized businesses (SMBs) are adopting systems that bring together the Internet, direct deposit programs and employee empowerment to reduce costs as well as eliminate much paperwork.

Another side benefit, according to experts interviewed by Small Business Digest, identiy theft through the retrieval of discarded pay stubs can be reduced.

Previously restricted to larger companies with huge payroll processing capability, paperless programs are new moving downstream to smaller businesses.

Aimed at companies with as few as 50 employees, employee self-service (ESS) technology reduces and can all but eliminates paper-based transactions thereby lowering costs.

Payroll today is still a largely paper-based process in small and medium size (SMB) firms and thus, is an area ripe for cost reductions.

According to Tom Tilllman, of Best Software, these transaction costs include the time required by employees, managers, and administrators to collect, approve, and enter timesheet information. Other activities include the processing of voluntary deductions (such as employee benefit premiums) and W-4 tax withholding elections, as well as the distribution of W-2’s, paycheck history details, and other employee information.

In a recent paper, Tillman argues that with an ESS system, all these processes can be accurately and securely moved online, saving significant time and money. And by combining ESS with direct deposit, even paper paycheck distribution can be eliminated.

Tillman’s company reports his company worked with Baltimore, Md.-based Annie E. Casey Foundation (AECF) to launch their ESS system one year ago. The rapid growth of the private charitable organization demanded a more strategic orientation of its HR staff. ESS helped AECF redirect its efforts to increase productivity, as well as minimize routine administration without compromising service to its 150 employees .

Information Available Online

Tillman also reported on the 84 employees at Butler, Wis.-based Molded Rubber and Plastic Corporation (MRP) have access to its ESS system. This allows Molded Rubber employees to view and print their pay history details whenever information is needed.

All 51 employees at Wilmington, Del.-based Nuclear Electric Insurance Limited’s (NEIL) take advantage of its direct deposit service. With their ESS system, they can see their pay history detail, as well as quickly and easily view and print their pay stubs and W-2 forms.

Because ESS serves NEIL so well now, the company reported that it may add additional self-service access for W-4 updates and time-off requests and approvals in late 2005.

For the 230 employee and Mesa, Ariz.-based Talley Defense Systems wanted an ESS solution to minimize the amount of paperwork and phone calls to its HR and payroll departments. Talley employees can use its direct deposit service, and then view and print their pay stubs using its ESS system. Employees can also use ESS to print their W-2 information for their own purposes.

“We enjoy providing a technology service to our employees, because they deserve it,” says Marcie Franklin, Talley’s director of HR. “With several employees working from other time zones, it’s nice being able to offer everyone, regardless of location, the same access to HR and payroll information.”

Tillman also points to the nearly 400 employees who have achieved a 100 percent paperless payroll system at Winston-Salem, N.C.-based Truliant Federal Credit Union. The company became a very early adopter of ESS technology. With employees in five states and 25 locations, the credit union implemented ESS four years ago.

Direct Deposit Component

Truliant’s entire workforce uses direct deposit. Because of ESS, Ballard estimates her department saves at least a half day’s work per pay period by eliminating the need to print and distribute direct deposit advices (DDAs).

To further automate their payroll processes, Truliant implemented a time and attendance package that integrates with its ESS and payroll solutions, enabling the payroll department to purge additional paperwork and administrative overhead.

The cost and complexity of ESS technology have diminished significantly over the years — to the point that every small and medium-sized organization should now seriously evaluate how ESS solutions, such as “paperless payroll,” can cut costs and improve employee services for them.

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