Why regular audits matter in Payroll

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[00:00:29] Someone could be set up in one aspect for hourly salary and they're getting paid right, but their coding, their mapping may be wrong. Welcome back, folks. This is episode 139. As we start the new year and already our second episode in the new season. Before we get into it, what's up, Walt? What's up? How are you? I'm good, man. How's the new year treating you so far? Oh, no, I'm sorry. It's not the new year.

[00:00:58] You're on the Tuesday already. Yeah, I know. I'm jumping ahead. I'm jumping ahead. I'm messed up because the holidays got me messed up with the days and where I'm at. Yeah, right, right. That was the same thing to me today. I told somebody else, like, happy Tuesday. I'm just like... And now you wish it was Tuesday. I'm already getting to the break. Yeah. No. Life is good. You know, constantly trying to stay grateful. Yeah. Yeah. Humble. Yeah.

[00:01:26] I've been probably overusing this saying that I've been saying for the last couple days. But I've just been saying another day. Instead of saying dollar, I was saying another dream. Another day, another dream. I like that. Oops. Try to stay positive and stay focused. And then just really just to tell you something inside of what I did. Just want a little spiritual cleansing type of thing. I know New Year and New Media, I know you don't like that. That's the term because, you know, but I really did. I just don't term.

[00:01:56] I get folks need, this is a good time to do change, but yeah. Yeah. Just really took some assessment of where I'm at, where I want to be. Driving around some of these neighborhoods in Georgia, really seeing like some lovely, beautiful home. Mm-hmm . Really just saying, man, like I, I'm blessed to be where I'm at, but there's some other places I'm trying to be. No doubt. And just need to make sure that my focus is in the right place and not get too bogged down by the trivial spot. Yep. And worried about the little small. Not saying that it don't matter. Yep.

[00:02:26] Not saying that they're not important or anything. Just not giving it too much of my everything and just realizing, hey, it's okay to be at peace with some stuff in line. This is some stuff. And some people are. Yeah. You know, pretty much. Pretty much. And I have, I was talking to my therapist today and, and I know I told you before, sorry, man. I've been in a restful place where. Yeah. I would normally ask work all.

[00:02:56] It's not work, but work on our thing. And in addition to a nine working on our business and all that, and I haven't been motivated to do so. And my therapist was like, your body's going to tell you what to do. Right. This just don't worry. Don't worry about that. You'll be okay. And she was like, it's okay. It's, you know, it's okay. And, you know, just pay attention to your body, pay attention to what it is and don't push it. And, you know, she's like, I get it's great to be ambitious.

[00:03:25] And I, and so was she, you know, my doctor is very ambitious as well. And, you know, but she was sharing things to me too. She was like, look, I'm older and things didn't start happening for me in my last few, four or five years. And she's, I don't even know why. And I was like, no, I know why. Cause it's like, we say all the time, it takes 10 years to become an overnight success. Yeah. Sorry. Fam. But yeah, that's, so I was just giving myself grace there and just being like, all right, cool. Yes.

[00:03:53] And just, it's, it's definitely a new place for me. And I'm just trying to navigate the terrain and figure re was just reevaluating. I mean, where you just like, I mean, wifey just got, had a good conversation about, all right, what's the next 20 look like? What do we got to focus on? What do we need to prioritize? And I was going to talk about budgeting is one of them. Check us out. Check the, it's about your paycheck episode out that comes out this week also.

[00:04:22] Cause when we talking about budgeting and so, yeah, man, just on that vein, I, what I don't like is. It's like having to, and again, a lot of it comes from being talking. Let me see. How can I say being aware of. Addictions and what addiction addicts have to go through to rehabilitate and not attaching things to, oh, I got to start on Monday. All right. Got to start on the new year. I have to start on the first.

[00:04:49] I was just listening to a news clip and they were like, they were calling it something like by the second Sunday in January or some crap like that. People already fail their new year's resolutions. Like they call it failure Sunday or something. I don't know. Maybe it's later in the year, in the month or January, February. I don't know. But I was like, yeah, don't, you know, so I don't, and that's all I mean by it. I don't hold myself to on the first it's gotta be. And nah, come on. But think about this.

[00:05:18] There's something that you say, and I know we're, I know we're staying in this vein for a little bit, but I think it's necessary because I think a lot of like you and I, we just keep going and going and going and going and going and that's where that burnout comes at. Yep. And. Yep. Almost like NASCAR. Oh yeah. You keep doing less. You eventually have to go into the pit stops. Yeah. Otherwise you're going to run out of gas, right? Yep. Or your tire is going to blow or something's going to blow. Yeah. You gotta be. That 88 is going to bust, you know? Yeah. Yeah.

[00:05:48] You gotta get new, more fuel. Right. And like all those different things happen. But if you keep pushing your limits, you're either going to run out of gas or something else will happen or whatever. Yeah. And you won't be able to finish the race at all. I think I read this thing online and it was talking about the three R's. Right. And it was like recharge, reset, restart. I like that. Recharge is when you're, uh, recharge stage is when you're recovering and refueling. Right.

[00:06:17] The reset stage is when you set a little goal and the restart stage is when you get going again. I like it. It's okay to be in the stage that you are right now. Sounds like you're in that recharge. Yep. Where you're recovering and refueling. Right. You'll get, I got what I'm saying. You're at that pit stop. It's okay. You binged that mass car going around for 30 years. For 30 years. Yep. And then you're going to, then eventually when you're refueled and recovered, you'll set that new goal and then you'll get going again. Yep.

[00:06:44] So this is not a, this is just a brief moment that is needed for you. Yeah. And my therapist was saying too, I mentioned, I was, I watched The Wire, the show from HBO. It's 20 years old, the show already. And I watch it every few years. And yeah, that, that's what, that's what introduced Idris Elba to the world. Um, and I watch it every few years and whatnot. And if not every year, once a year, maybe.

[00:07:10] But one of the thing, one of the statements that was said, and it was life is what happens while you're waiting for those moments that may never happen. That just, I'm taking, I'm enjoying my time with the family more. I'm intentionally trying to be more present and help out in the things that my families are going through right now. Yeah, man. Just, you'll never get the time, those kinds of moments. Never get the time back. Yep. Never is. Yep. Yep.

[00:07:41] Kids grow up really quick. And so, yeah, I think it's all, it's all in its time. And just going through those phases. Yeah, man. Hey, everybody. I'm Lori Rudiman. What are you doing? Working? Nah. You're listening to a podcast about work, and that barely counts. So while you're at it, check out my show, Punk Rock HR, now on the Work Defined Network. We chat with smart people about work, power, politics, and money. Are we succeeding? Are we fixing work? Eh, probably not.

[00:08:10] Work still sucks, but tune in for some fun, a little nonsense, and a fresh take on how to fix work once and for all. So, anywho, let's keep it moving here. Third. We're talking about audits today as we are setting up for the new year, right?

[00:08:28] I think this is a great time for payroll professionals to think about what audits that re-evaluate the audits that you already do and try to factor in any audits that you discovered you should have been doing this past year, right? And, all right, what are the audits that you need to set up? Because audits should be regular, recurring, and scheduled.

[00:08:52] So, we want payroll pros to get on point, ourselves included, just to make sure that you're on point, you have a schedule. It's good to show leadership, hey, these are the audits I perform, what's good before payroll, what's good after, things like that. But before we get into it, we got some article today. I didn't find anything I liked out there, but Walt has something for us, and we'll dig into that. I wasted my time anyway talking about other stuff.

[00:09:18] You know, at our biggest, that's what you were supposed to mention because there's one person, somebody out there that's struggling right now, no doubt. And that is what they needed to hear. Yo, I'm with you, whoever it is, I'm with you. Yeah, man, we all are. Word. So, I have an article from lunarcloud.net, and it's about an HR audit case study that they submitted out there. The links will be in the show notes. Okay.

[00:09:43] And so, it just has to take away from the HR, HR IS audit case study that they conducted. I'm going to tell you what the challenge was. The challenge was to determine, the objective of the challenge was to determine if the current HR and payroll systems aligned with the business objectives. Ooh, that's a good one. And growth plans. A little bit more context there. There was a construction company or a contractor, a family-owned contractor company, and they're called the Admore Group.

[00:10:13] And they faced growth challenges and a company restructure, which necessitated a re-evaluation of their HR IS processes. The process of this audit, Lunar conducted, Lunar Cloud conducted a comprehensive audit involving different workshops with key stakeholders to assess HR and payroll needs.

[00:10:35] And then they did a gap analysis, which was a detailed analysis compared, that compared the current system capabilities with business requirements and identified areas of improvement, right? Where areas they could improve at.

[00:10:50] So the outcome of this for the short term was to implement immediate enhancements and by configuring the existing functionalities within the current HR IS and addressing those minor operational challenges. The long-term vision was despite those quick fixes, the current system didn't fully meet the company's needs.

[00:11:14] And so Lunar Cloud recommended that they consider it a new HR IS solution to support all their different areas, HR payroll, you know, force management. That's just a good article. I just gave you the short of it. So you should read it. When you get a chance, you can see exactly what they did and why they did it. And it's a good case study. And there's other case studies out there. This was one of many that I found. I just chose this one.

[00:11:43] There's some case studies out there. And so since we were doing an audit, this was an external audit from a third-party company of a company's business. And then I'm helping them out, aligning their processes and finding out that, hey, we need a new. That's good. That's cool. And that's something that's new that became new to me anyway while we've been doing this show is that I intentionally hiring a third-party auditor, not a mandated auditor for some reason.

[00:12:13] Because we have payrolls always dealing with mandated audits. There would be the bank because you have a loan. If you're publicly traded, you have mandates. What else? 401k audits. Department of Labor audits. If you ever had to be, that's not good usually. Workers' comp audits. So we always have these built-in have-to-do things. But I think it was kind of a little bit of, I hadn't thought about that. Oh, wow. Yeah, that would be good to essentially hire a third-party company to help you.

[00:12:43] Just to help you, right? Audit our stuff and help us get better. To the point of getting better. Yeah, good for them. That's a good, that was a good idea on their part. And like how they said, what was the objective? To align to business objectives. Yes. That's the, yep. Good stuff. All right. Get into it. Let's pay the bills. Shout out to Time Track Go. If you're tired of messy timesheets or complicated time clock software,

[00:13:13] Time Track Go is an intuitive solution that makes managing employee hours simple and efficient. But don't take our word for it. Customers have given Time Track Go a 4.7 out of 5 stars on Capterra. And they have been awarded badges for best ease of use and best customer support again in 2024. Here is what some of the customers are saying. Great value. Best clock in app on the market. Great time clock for the modern office. Intuitive and efficient.

[00:13:42] Simple to use and price right. And customer support is awesome. And that, I think that last one is really good for when it comes to payroll professionals. Because that's half the battle for us, right? If our employees are calling in, hey, the time clock, this and issues, we need to be able to get our, get on the horn with them or email or chat, whatever this is, whatever. And get answers. You know what I mean? Point them in the right direction. Yes. Every payroll could be structured differently, right?

[00:14:11] You could just simply be a processor. But somebody else handles the configuration. The time in it. Yes. I'm an attendance, right? Yep. I might follow somebody in HRS. Yeah. Or depending on what hatch you wear, right? Yep. Great points there. And I'll shout out again to TimeTrackGo. So to learn more about a simply better solution for time tracking, real-time reporting, PTO automation, payroll integration, and more, visit www.timetrackgo.com.

[00:14:40] That's T-I-M-E-T-R-A-K-Go.com. And start your 14-day free trial today. Let's go. Let's go. Let's get into our main topic. I really, I think you came up with something. What'd you say you said? Regularly, recurring, scheduled, audits, or something like that? Should be regular. Should be scheduled. Yeah. There was something else I said too. Yes. So I'm over here.

[00:15:10] Like, when you're trying to make an acronym. Yeah. So I'm over here. I'm over here in one of these. I system. Hey, do you a job? Oh, God. So it gave me RAS. RAS. So RAS. So RAS. Regular, audits. Oh, nice. I love it. There you go. Get your R-A-S going. Get your R-A-S. R-2-S. R-2-S. Yep. Oh, man. Walt will definitely kill you with the acronyms, folks. Yeah, it will.

[00:15:40] But it's good, right? Because it's demonic devices, right? Yeah. Something to help me remember. Yeah. And I mean, honest, not for nothing. You like the godfather of acronyms for the world because here come the world with what we were talking about last week, EX, the employee experience. Yes, folks, but that's because we want to make it a cool term. It's EX. So anyhow.

[00:16:04] But yeah, as we get into the audits, what I want to point out, and I love Walt's List. I really like it. But mine first. Mine's, I think we complement each other well because I'm talking about some common ones and yours are uncommon.

[00:16:21] And I really like it, so expect me to chime in there a little bit, but some of the basics and what I'll caveat and qualify all this by saying is it is in no means a comprehensive list of audits because as we teach in our course, you have to let your business drive what audit you need. Right.

[00:16:45] Yes, we can give you some things to think about, but there may be something unique to your industry, company, state, block, building, people like that you have to audit because it's unique. Like, so keep and share with us what maybe that would be a great share.

[00:17:06] If you guys tell us like on LinkedIn, chime in on the page and then the episode, let us know what audits you do that nobody else really does or you haven't really seen another or even anywhere else. Anywho, and I did try to, anyway, these are basic, but who knows, basic to me, not to you. I don't know. But I did try to think outside the box when I saw your list. Walt got me going with it, got my creative juices going when I saw it. So anywho, pay stub review by state.

[00:17:31] You should, and this one I thought was really good because as a payroll professional, we don't often think about looking at the pay stub the way the employees look at the pay stub. I had a coworker recently who was like, oh, Brian, can you give me the stubs as they see them? And I was like, well, do you not like this feature that prints out the pay stub? And the employee, my coworker was like, no, because I want to make sure that I'm answering it to their needs. And yes, exactly. And no disconnect from how they see the stub. And I was like, no doubt.

[00:18:01] And with that being said, there are state-by-state requirements, California Way and West Coast as a whole becoming very employee-centric on what a pay stub has to have on it for your employees.

[00:18:18] So that is a state-by-state audit that may take a little while because you need to pull a sample of one check stub from every state and be sure to pull the stub that the employees are looking at, not your administrator view of some payroll summary. Yeah, it's all the same data, but it's not how they see it. So you want to be sure you do that part. Yeah. Yeah.

[00:18:43] It brings up another topic because you mentioned it before we segue here about EX, right? The employee experience, right? Right. Touches on that. Exactly right. Everything's being tailored to that. That's right. You want your employees to be able to look at a stub and be able to understand what they're reading because it could be equivalent by Greek to them. Okay. And be simple to us. Yep. But then they may not even understand it. Yeah, no.

[00:19:11] And I always go back to my friend Elmer who brought up, what up Elmo, who brought up his issue where he couldn't, and it was very simple. There was an end date on the stub, but it didn't say period end date. What period am I getting paid for? And I was like, that's a great question. And honestly, so it was a little something like that, that little things that, you know, is not a huge thing, but that's the employee experience. That's the point. Our next one is payroll distribution audits.

[00:19:39] So meaning at the gate, ghost employees. Okay. And this is becoming a growing conversation for Walt and I, because we recently were like, well, how do you guarantee finding ghost employees? And what we came down to was, ooh, you, the smaller it is, the smaller the shop, the easier it is. The bigger, the harder it becomes because you may have to go through multiple iterations of the audit. Right? What were you thinking?

[00:20:09] No, you're right. The larger it is, the more hoops you'll have to go through. Yeah. Audits. If people have certain access. Yep. A certain system access. And they're able to do something from a, say it's a manager. Or say you have somebody that's in a supervisory role that you allow them to prove time sheets. They don't do anything else.

[00:20:33] Maybe they could ask somebody in there that they're able to, an employee or an act or fudge the system or whatever. Or, or what's the word? Conspire. Maybe, right. Even if they only have a timesheet access, but they can conspire with an employee. I mean, look, I'm going to sneak in a few hours on your paycheck every time. You got to split it with me. Easy stuff like that. So you want to, and you kind of, you're taking my shine away here, bro.

[00:21:01] The next, one of my next, well, I'm going to skip. Now, hold on. I'll get to it. No, because I'm going to talk about access. So payroll distribution audit, try looking for ghost employees. Looking for duplicate payments. There's one employee getting more payments. Just like we said, Hey, maybe they don't, they can't actually set up a new employee, but if they have time card access and they throw in an extra 10 hours, every time this person gets paid is wait a minute. That's not on their time card, but it's on their paycheck.

[00:21:31] That's a good audit in it of itself right there. But that's a basic one. Kind of, kind of the hours from your time system should match the hours that are going into your payroll with, and if it's there, if there are discrepancies and you should, they should be noted. Red flags that suggest fraud. When I wrote this, I was like, well, what can they be? We've talked about this before. Duplicate direct deposit account numbers. Right?

[00:21:58] So if you did a, if you audited everybody in your company and you put in a list, this one's simple, right? If you listed all the employees and all the direct deposits and you just used Excel to highlight the duplicates. Hey, this is William Tincup, and I'd like to talk to you a little bit about Practitioner Corner Podcast.

[00:22:20] It's a wonderful podcast about the journey of the paths of how practitioners, both HR and TA, kind of go from high school, college, all the way to where they are right now. Some of the things that they've learned, how they've been successful, people that thrive around them, et cetera. It's a fun podcast. You'll love it. You'll learn from it. Subscribe to it. Thanks.

[00:22:44] There shouldn't be any people sharing direct deposits unless they're related, unless they're married, husband and wife, spousal relationships, or parental child relationships that could happen. Right? So anyone a pressure check. Hey, is this right? Just reconfirming you guys. I heard. Yeah, that's a good call out. And I'm trying to think of some other ones that we could think of. Maybe a lack of documentation. Yeah. Or some changes. Yep. That happened. Absolutely.

[00:23:14] Or if there's a bunch of changes. Like every paper, you're changing the same. Oh, yeah. No, that's a red flag. That's a good one. That's a good one. Yep. That's a red flag. I like the one where you said one time, it was like, if somebody's, if your system is automated, but for some reason, there's one employee is always manual. Why is that? Right? So that's a good red flag too. Another good audit is PTO accruals. Are your accruals?

[00:23:38] This is one that I like to say is self-regulating because an employee is probably going to call it out. But you never know. There's something you want to make sure accruals are happening at the right time and in the right manner for the employees, depending on how your PTO scheme is, whether it's calendar year, fiscal year or anniversary. The more complicated, the harder and more often you need to do accrual, the audits.

[00:24:06] A big one, exempt versus non-exempt, hourly versus salary. Right? Yes. And what I find very common is someone could be set up in one aspect for hourly salary and they're getting paid right, but their coding, their mapping may be wrong.

[00:24:24] And again, I find all too often exempt, non-exempt, that specific flag is off and can be is the one that really can be off because it's usually just a data point that is for reporting. It doesn't really drive the calculation at all. Right? So that's a good one to literally look at that data point exempt versus non-exempt hourly. Right?

[00:24:49] So basically in a spreadsheet, you want to see all your exempt people should also be salaried unless they're salaried, non-exempt. That's different. But then if you do have it, then you, that should be noted somewhere in that, that that's correct. They are a salary, non-exempt, um, data security, which wall alluded to earlier. Who has access to your system, to payroll, to HR, but not only who, what do they have access to?

[00:25:21] Okay. You can't just look at access and be like, oh yeah, Walt should have access to the system. Well, wait, she had, should he have access to payroll or should he have access to HR? Should he have access to both? Yes. What level of access should he have? Right. Should I have administrative access? Right. And managerial. Are you able to create other users? Should you, who has that access? So it's different levels to the access. What's up?

[00:25:49] Can I go in and change the info for myself? That's a great call out because some systems can give you, gives you the ability to prevent that from even up. And that's a good data checkpoint. Wait, do our practice, do our administrators have access to change their own information? If so, who's checking their data? Who's checking their data? Who's policing the police?

[00:26:16] I worked with one that they were permitted to change their own data or change their own pay. So there was a pay increase. They were able to put it in for themselves. That's crazy. Well, it's not crazy if it's good controls, right? If that, if somebody's looking at that specifically and monitoring that, then it's fine.

[00:26:40] Because what do we say in all these fraud cases and things that lack of oversight? Lack of oversight or misplaced trust. Yeah. With payroll, you have to trust but verify. There's no, oh, that's my buddy. I trust him. Nope. Nope. My next one is cross-functional, right? Like that. I used to say Holy Trinity.

[00:27:02] I think it's Bart's book, Bart Vanderstorm's Payroll Minds book, where he kind of does an overlap of not only payroll, finance, HR operations. And then that kind of grew once we started talking to Mark Mears about the fours, things and coming in fours. He talks about things in fours in his book.

[00:27:25] Adding the Holy Trinity is evolving to a four type of thing where it's HR, payroll, finance, and operations. Because we do have to work with operations for our field because they usually dictate the things. But with that being said, each department is going to have some different data requirements for the employee. Ops needs to know what store they're in, what office they're at, right? Finance needs the GL set up properly.

[00:27:54] HR needs their pay rates, right? And the compliance, right? And payroll needs everything to be accurate, you know? So we all have our own little data points and things. So if you want to be a good partner, you reach out to your stakeholders and you say, hey, what can I, what, are there any data issues that you're seeing in the employee experience and the employee data and blah, blah, blah. And you can do that. And my last one is OT by state.

[00:28:21] I think that because I keep learning more and more about different OT requirements in different states. The most recent one that I learned about was an OT requirement if they made under a certain amount of money. If their pay rate, for instance, I believe it's in Nevada.

[00:28:41] And if you don't make one and a half times the minimum wage, then you're eligible for OT by the day type of thing. You know what I'm saying? And then it's like OT in the 24-hour period. We spoke about that in New York City where if you, I think it was like retail or something, like they can't close late and then open up the next day early. You didn't even an OT requirement. It was like they're not allowed to do that type of thing. Yeah.

[00:29:10] So state by state is becoming so much more unique by state that we really got to set up our audits by state and make sure you're accounting for each state and all the things that are happening by state for your employees. Yes, sir. So that was my list. Nice, man. Thank you for sharing that. I was trying to come up with the acronym for the Holy Tretti. It was karma twain. FOP. P. payroll, operations, finance, HR.

[00:29:41] Or FOP. FOP. FOP. P. FOP. Oh, no. FOP. FOP. FOP. FOP. FOP. Oh, God. FOP. Oh, I, so I have some uncommon or maybe some things that you may not consider when it comes to doing it. Yeah, I didn't. Yeah, I like this.

[00:30:07] Some of them are kind of the same, in the same arena as some of the things that Brian mentioned. But the first one I have is cultural sensitivity. When it comes to payroll processing. That's a cool mindset. I was like, what is this guy talking about? And then I was like, oh yeah, that makes sense. So think about it. Like a lot of organizations overlook the impact of cultural differences on payroll processing audits, right?

[00:30:33] And for instance, understanding local holidays and customs can prevent sort of payroll areas, errors and improve employee satisfaction. Maybe that's something that you can audit is say, hey, can I run a report that gives me the demographic of my organization and lets me know if there's anybody that we should have consideration for. Is there a large enough contingent or is there a large enough group in the workforce that

[00:31:01] we have to potentially make a consideration? Think of processor. What if your payroll, what holidays land on processing week that might be sensitive for your payroll processor? I was just having something done in the house the other day and it was on Friday and it got dark and the worker was Jewish. So he's, hey, I have to stop. It's my Sabbath and Shabbat and I got to go. My wife is calling me.

[00:31:30] My boss is trying to get me home. And I was like, oh, don't worry. No worries. Good thing he got to a good place and he was able to come back on another day and finish up. Thank goodness. Because I can only imagine some customers being like, I don't care. You started the job. You should have thought about that before you started the job. I'm paying you for the service you need to finish it now. I paid you today. You got to finish. Come on. You know what I mean? That's a really good call out. And that's what it made me think of.

[00:31:57] Not only your, the employee experience, but also your payroll processing team and your person. Because a lot of times it's just one of us. Or is it a team and everybody on the team are processing. And if it is, try to figure out something for them. So to make sure that they're good. That's a really good one. Number two is the impact of your network on audits. Yep.

[00:32:21] So one of the things, my network specifically, because you could be in California, but your office is in Georgia somewhere. And you want to make sure that an audit that you conduct is making sure that your employees taxes are up correctly and that you're compliant. Yep. Right. So there's been times if you're spread out and you have multiple locations and you have

[00:32:47] a room and a workforce, you want to make sure that you're doing that audit because you could save yourself some headache. You can have some pretty unhappy employees because they're trusting the system. They're not looking at it. Right. They're not looking at it. And some of these people are, could be in the C-suite. They're not really looking at their pay like that for the most part. Some of them do, but a lot of employees don't look at their stuff. No matter what level of employment they're at. And true.

[00:33:16] You doing this audit would help prevent them having some headache when they go to file their taxes the following year. So that's a good, that's a good audit to conduct. Yeah. One of the, another thing is the environmental impact that may be there. When I say environmental, like I'm taking the footprint of aero systems. Right. And this includes the assessing, doing an audit to assess the energy consumption of your IT

[00:33:44] infrastructure and maybe exploring paperless payroll options. If you having to constantly prick checks and do all this and you're, say you're a payroll PEO company and you're always printing the synonym and this and that, like how much energy is that taking up? How much does that cost in the company? Yep. You know what I'm saying? Somebody considering that? Mm-hmm. You know what I'm saying? The shipping, the courier or the delivery service you're using. Think about it.

[00:34:14] The, the, if you got a hundred plus locations, 200 locations and the courier, they charge for a package at least $30. You're talking about 30 times hundreds of locations. Oh yes. Yeah. Yeah. Why? Why? Why? That, that alone should push you to go digital, go green and just digitize. Yeah. Yeah. Yeah.

[00:34:40] Another audit that you may want to consider is your, the integration with other systems. Yep. Right. Maybe you want to, before you consider bringing a new payroll, this software. Yeah. You wouldn't want to see our adding something to the tech stack stack. Yep. Yep. You want to see if it works with all the other systems, right? Can they seamlessly integrate? Yep. You know what I'm saying? Because if they can't, that can lead to discrepancies, which can cause payroll errors

[00:35:08] and potentially some compliance issues. You definitely want to check those things out, man, because some people don't ever think about that. Oh, I just heard the system, the system has all these bells and whistles that can do this, but it can't integrate. It can't integrate. Yep. Exactly. And if it doesn't integrate, what is that going to do? It's going to create a manual process for your team. And even if it does seamlessly integrate, that creates an audit point.

[00:35:33] Even if it integrates you, that creates a point of audit because that, that could break down. There could be glitches. If it integrates seamlessly, there's mapping that's involved there, right? If it's two different systems, they have to map together. They have to have some type of commonality to map. And if that breaks at one, at any point, it could be just one data point that drives the integration and somebody updated something and messed it up.

[00:36:02] And now that person is not integrated anymore. Right. That again. So every integration you have, if it's not the same, even within systems, sometimes they're like, oh, it's all seamlessly integrated. But then when you start digging in, you're like, oh, but this is in the background. This is really a different system, but if we make it look like it's one and blah, blah, blah. So any, my point is even with integrations that creates an audit point for your team. Yeah. Yep. Great call.

[00:36:30] And then my last one is something that you touched on. Yeah. Cyber security risk. Right. And we know that payroll and HR systems are prime targets for cyber attacks. Auditors should assess the security measures in place. What security? Oh, it was good to know who has access and all this other stuff, but what is preventing? Are you working as a payroll pro or HR pro? Are you working with your IT team?

[00:36:57] Are you discussing what preventative measures are in place to prevent something from happening? Yep. You know what I'm saying? Did you have a blocker, email blocker in place or something in place to tie, to highlight an email saying, hey, this is a suspicious email to tag it or flag it, right? Do they have that? Something as simple as that could help prevent something being mispaid, overpaid, or somebody

[00:37:26] stealing pay from the company, right? Yep. Those are different things to consider, man. There's all types of audits that you can run out there. And these are just some of the... Hi, this is Stacey Harris. And this is Terry Zipper. And we're the hosts of the two podcasts under the HR huddle. On Spilling the Tea on HR Tech, we uncover the latest trends, truths, and challenges from Sapien Insight Group's groundbreaking research and our analyst insights, serving up everything

[00:37:53] you need to know about HR tech with no sugarcoating. And on HR, we have a problem. We tackle the toughest workplace challenges head-on, offering you expert advice and actionable solutions to help HR leaders thrive in today's fast-changing world. Whether you want the scoop on tech or tools to solve people problems, we've got you covered. Take a listen and subscribe.

[00:38:20] If you want to become part of our community, we'd love to see you. Less common ones. Yep. I love it. That's a great list, man. Great lists. So as we end the show today, Walt poses a great question of the day. Are audits the best way to catch irregularities, trends, or shifty processes? I think, I mean, short of even with automate, I would say yes. Right.

[00:38:50] I like throwing in automation to this mix. It makes me think of celery, like the vegetable. Our folks over at celery.com. They named it that way because they were trying to get close to salary. Um, and I love the, I love like the play on words and whatnot. If you think about our friends at celery, they have, um, automation AI. I don't know what you want to call it. We got to talk about that one day. Right. I felt like I brought that up.

[00:39:19] The difference between AI and automation. Automation. Yeah. Right. Um, so they have something that you can run your prior payroll history registers through, and it'll point out anomalies that you might've missed. And I think that's an amazing thing. I think every company should use their service quarterly at minimum to see what's going on. You know what I mean? Yeah.

[00:39:45] I think that's the only way you're going to catch irregularities, trends, or shifty processes. Right. What do you think? I think the answer is it is yes. Yeah. I think no matter how you do it, if you do those things, if you have to run the reports yourself and like. Exactly. Keep it out and do all this data and use Excel or Google sheet formulas, whatever it is. Whatever it is. Whatever you have to do, or if it's automated, like you were saying, no matter what, an audit

[00:40:11] is going, should help you catch these things and identify these different things. But yes, I think that running an audit and protecting the audits are the best way to catch these things. How else are you going to catch it? No, I think there's something to be said. No, you're right. Again, you're right. There's something to be said also about experience. Um, and I don't know if it's experience or just like, uh, what are you, I don't know. You tell me what this is, right? Cause one time I wasn't looking for it.

[00:40:39] I was doing a, we're upgrading time and attendance systems, right? It was ADP. It was going from their old school system to their new one. What I noticed was folks had hours on Saturday and Sunday. Yeah. Mind you, the business didn't require these employees to work on Saturday and Sunday.

[00:41:04] This group of employees were not scheduled to normally work on Saturday and Sunday. So I, and I, and I was like, wait a minute. Okay. So I caught my eye once and I was like, wait, Saturday and Sunday. Then I kept looking at more. And I, and I was like, yo, well, this is a lot of people working on Saturday and Sunday. Now they weren't stealing because it was in fact hitting their buckets.

[00:41:29] It was taken away from their buckets, but they were using PTO time to pay themselves more. I mean, technically. It's not, well. It's not approved. If it's not approved, it's just, just putting it on the weekends so you can pay more of that. That's still my salary, my bi-weekly salary. No, they were hourly though. They were hourly though. That's, that was another reason easily happening.

[00:41:57] But now my point is me catching that is that it wasn't really an audit. It wasn't AI. It wasn't automation. It was the peril guys. It was, yeah. I mean, it was just knowing it.

[00:42:12] I think it was, it was just, and I feel like it was experience and just knowing now that that's a good call, like a good, I don't know, connection to the article you brought up in the beginning about aligning to business objectives. Yeah. Because I knew that the business didn't run on the weekend. I knew, and this is, it's actually a good call out to why payroll people should understand their business and their company. Right.

[00:42:40] Because if you, if you, if I didn't know any better out, oh, this is fine. But I knew that they weren't supposed to work on the weekends every now and then I could see one or two people, but it was like a pattern. Right. And I would go ahead. I had a similar situation like that. And I won't give to all the details, but the manager said the reason that she was doing it that way. And that she had always done it that way was because she would always, well, it was a system limitation really.

[00:43:10] Okay. Because they could not go back and make historic edits in the time. So she would post time edits for the prior payroll on the weekend. Was that true? Was it true that there was a system limitation and that sort of. Yeah. They did not have access to, to go back and. Okay. But why not? Oh, I mean. Yeah. So the, what would the right way to be have, to have done that?

[00:43:40] Something. Trying to get it fixed and saying, Hey, let somebody know. Hey, I want to go make sure this is done. And the reason it was caught up was because I was in the middle of an audit. I didn't have to do a fortune. Like you just, you followed it to me. Like, but. Yeah. I found it by accident. Yeah. Yeah. It was an audit and I noticed the way, and she put a note in there. So she wasn't trying to steal. She said, Hey, this is for the last pay period. And I'm just like, well, this is work time and it's adding to their. Oh, yeah.

[00:44:08] Oh, he can't do that. Yeah. And so she's, Oh, that makes so much sense. That probably makes you. Wow. I'm always so high on T. Oh. So doing this, it highlighted several things. Mm-hmm. It highlighted. Oh, my God. Going back to that article again, it highlighted so many different areas where, where that system, where that process was failing. Yep. Right. Because people were getting overpaid and had been getting overpaid.

[00:44:38] And the system, the process in place was not working. Wow. Properly. Wow. And this had, she had been, she had to, I think she had been there at least three or four years. Mm. Well. Free over, free money for them. Wow. And they must've been in a good financial situation because most companies are always like, why are

[00:45:05] we, they're, they're usually managers, usually very sensitive to overtime. Yes. I mean, she didn't have, she didn't have her, overtime wasn't egregious. Oh, okay. But it was always right at the. The top. As if it's right at the limit. Yep. Yep. You know what I'm saying? Wow. She could not figure out why. So she found out why didn't, her old T just dropped. Dropped. My gosh. She always had stragglers. Always have this. We're always sitting in late. We're always doing that.

[00:45:35] Now they work in the system. Yeah. Some of the employees do know. Mm-hmm. Thanks a lot for, we went a little over today. Maybe we'll fix it in the editing, but sorry about that. We love you folks. All right. Peace. Before we sign off, here are a couple of quick things. Don't forget to follow. It's about payroll on LinkedIn. And it's about your paycheck on Facebook and TikTok. Thank you for being part of our payroll community.

[00:46:05] And thank you for being a part of this journey with us. Until the next time, keep learning, keep growing, and most importantly, keep going.