Payroll

There’s always more paperwork.

By Fred Steiner

The Internet and other communications technologies will have the same effect on the rock-steady practice of payroll as they’re having on such areas as banking and retail sales. Your employees-think of them as customers-will do more of the detail work regarding their own paychecks. And if you play your cards right, they’ll thank you for it.

A disproportionate amount of time in the human-resources department is spent on routine and repetitive paperwork such as changing addresses and revising W-4 forms.

Onsite automation-intranets and telephone touchpad menus-are being used by the largest companies to let workers make their own information changes. These innovations will trickle down to smaller businesses.

As direct-deposit payroll software drops in price, electronic commerce is becoming an option for the HR unit of businesses of any size. The main cost issues now are the processing fees

charged by some banks to smaller account holders. As bank mergers produce larger and fewer players, the range of fees will likely narrow.

As for innovations in the discipline of payroll, think incremental at best.

“We are sort of a reactionary type of department in payroll,” observes John Nasea, C.P.P., president of Paytime in Solon.

On the government front, the usual dichotomy of increased intervention and promises of reform should offer all kinds of change and very little relief in the blizzard of paperwork required when you have employees.

One change that actually is coming, after more than one delay, is automated filing with the Electronic Federal Tax Payment System. Future notions in D.C. circles involve mandatory electronic filing of everything from quarterly reconciliations (Form 941) to W-2s.

The main obstacle to many of these initiatives is the handwritten signature. So the day may be approaching when at least one computer in every office is equipped with the type of electronic signature technology used by UPS.

Tax reform continues to be a Congressional football and even minor successes like the Taxpayer Relief Act of 1997 end up with hidden minutiae that adds more filing work for business. In the end, there may be revision, but simplification isn’t likely.

Notes Nasea: “They give and they take.”