As leaders wrestle with business continuity plans and try to manage the impacts of COVID-19, questions have been asked on what to do should an organisation’s payroll system not work as normal. At Datacom, we have been fielding questions on system availability and the ability of our staff to support our clients.
Fortunately, our payroll systems are a single instance cloud solution, backed up by comprehensive disaster recovery plans which are regularly tested. A modern cloud-delivered software means that customers no longer have to support their own infrastructure and they and our staff can access our systems anytime, anywhere. A modern cloud-based provider will also have the resilience of multiple, geographically separate data centres from which it can operate, so that should one location go down, the other can pick up the load with little disruption.
One option being considered by some customers is to simply run a standard payroll or rerun the last pay period’s worth of data. On the face of it, this may seem from an outsider’s view of payroll a legitimate contingency plan. Payroll would simply make the necessary corrections in a future period. However, from a payroll perspective, these corrections can result in a huge amount of work to contend with and, as such, I would recommend that this approach only be taken as a last resort. Payroll is a very time-sensitive business function with often very little time to support non-routine requests. An example of this is the quick setup of additional project teams to support the New Zealand Holidays Act audits and remediation projects.
By running a standard pay or re-running a previous period, you are essentially paying incorrectly a number of staff their correct entitlements, leave payments, allowances and deductions. Each of these will need to be corrected in a subsequent pay run and, if not done immediately, the effects will compound over time due to the cumulative nature of leave calculations. Over time, this will make corrections more complicated to resolve as the problem worsens.
When planning for disruption in payroll, our recommendation is to avoid falling for what might seem as the easy option of simply running a standard or last period’s pay. Treat this as the very last resort and work instead to understand how payroll can continue to run as normal by adding additional processes and resources to ensure that the regular flow of payroll information can continue. This approach will ultimately result in a better outcome when we come out the other side of what could potentially be a long-lasting disruption.