21 September 2021
Horror stories aren’t restricted to tales of ghosts and werewolves – payroll professionals will tell you that there is no worse feeling than realising when something has gone wrong. Can you relate to any of the scenarios below?
The great payroll email scam
Some horror stories haunt you for life, and this one will no doubt stay with me until I press the big red button for the final time.
It was one of the busiest periods of my career, during a system implementation.
There was a short period of testing to familiarise us with the new system and then the parallel run phase started. Everyone in payroll will know what those two dreaded words mean…doing everything twice.
Absence hit the team hard during this period and the extra workload meant the hours between nine to five flew by in the blink of an eye, and overtime went through the roof. However, none of this was my actual payroll nightmare.
The nightmare arrived on pay day, when a director called to enquire why he hadn’t been paid. I scanned through his records and noted that he’d emailed to change his account details that month. I called him back to confirm the change in details and he told me the words that no payroller wants to hear – it wasn’t him who made the request. It was a scam.
I was horrified I’d fallen for such a simple trick, and I’m not ashamed to admit I shed a few tears when I confessed my error to my manager. We rectified it straight away, and with the new system in place, we have been able to ensure all bank changes take place via employee self-service. The security measures within the system are stronger than any manual change could ever be, and it’s a lesson in security that I’ll never forget!
Payroll gets Punk’d!
Christmas is usually the wrong season to set a horror story, but it’s where my story takes place. The company I previously worked for would often give a bonus to staff at Christmas, but it had been a tough year and it seemed unlikely there was going to be one this particular year. The payroll team would usually find out three or four days before BACS deadline day, so we had sufficient time to include any bonus within December’s pay.
The day before BACS deadline day, I left the office having heard nothing about a bonus. That evening, my social media was bombarded with pictures of an official communication that had confirmed there was going to be a Christmas bonus. Immediately, I panicked. I didn’t have enough time to prepare the figures and send BACS – TOMORROW.
I called my boss to enquire how on earth I hadn’t been informed about this before, and to my surprise, she had no idea either. It was at that point we started to get suspicious, and within the next hour, our suspicions were confirmed. It was a hoax – or more precisely, a prank that went viral. The following day, I sent the BACS as planned and my Christmas payroll prank saga soon became a distant bad dream.
Pandemic payroll panic
The pandemic has caused many nightmares for payroll professionals so I’m sure I am not alone with this nightmare.
After setting up my new working space on the kitchen table, I was relieved to be able to successfully log into my payroll system to process the monthly payroll. However, to my surprise, the screen I was looking at didn’t seem familiar at all.
For some unknown reason, the software was still sitting at period twelve – the year end we completed whilst in the office hadn’t saved on the server. After days of attempting to resolve the situation, the cut off for BACS processing days was looming, so there was no other choice but to manually calculate the payroll.
Out came the manual tax tables so that I could manually calculate 70 employee payslips so I could send a figure across to the BACS office. Now I know I could have used last month’s BACS file; however, bonuses were paid in month twelve, therefore, they wouldn’t be as accurate. After two days on calculations, a BACS file had been created and sent for payment – phew!
As soon as I pressed the button, I had a call to say the system was now updated. Typical.
Although the task of manual calculations was tedious, I am happy to say that my figures matched those produced by the system, and everyone was happy…including my children, who had survived on takeaways for the previous two days.
The payroll gremlin
People often refer to ‘gremlins in the system’, and within payroll, software can do some weird and wonderful things. It is the poor payroll teams, and software developers, attempting to understand what has gone wrong and where, that suffer most when this happens.
In my scenario, it seemed like any other payroll run, and the team went about processing the payroll as normal, blissfully unaware of the chaos that was about to ensue. For some unknown reason, the software decided to place each and every employee on National Insurance (NI) category letter C, which is reserved for those who are state pension age and above. The team suspected this was the case when scanning individual payslips and finding that no employee NI deductions were being taken, but it was confirmed 100% when the gross to net report revealed total employee NI liabilities as £0.00 for the month.
There had recently been an update to the payroll software, so the payroll manager contacted the software support team, who we had a good working relationship with, to see what on earth was going on. After many profuse apologies, the support team explained there had been an issue with the latest update and managed to rectify the situation, and harmony was restored (along with employee NI contributions). The real horror story would have been if the payroll department hadn’t carried out sufficient checks on employee pay or applied their working knowledge of NI, as there would have been a workforce in receipt of much higher net pay than they were entitled to, and Her Majesty’s Revenue and Customs (HMRC) would have been, quite rightly, asking questions.
The incredible vanishing woman
Payroll teams are often expected to have a crystal ball and know all about the day-to-day occurrences in every area of a business, without being informed.
Obviously, this isn’t what happens, and this common misconception frequently leads to very big problems.
This terrifying story begins with an employee leaving a business to embark on a new career path. Nothing particularly worrying there, you might think. But then you realise her area manager did not notify anybody that this lady had left, which meant she continued to receive her FULL PAY for several months following her departure from the organisation.
Now you start to see how this tale is so frightening – overpayment is the dreaded O word that no payroll professional ever wants to hear. This is because they can be so complex and time consuming to resolve.
The team were required to recalculate the payroll for the months following the employee’s leave date and contact her to request the money back.
Fortunately, this horror story has a happy ending – the employee was co-operative and agreed a repayment plan with the company, which she stuck to.
Business-wide training was also rolled out to demonstrate the importance of communication between departments and to prevent the same situation from arising in the future. This has proven to be effective, as there don’t appear to be any other leavers that we haven’t been notified of… or are there…?
Do you have any payroll horror stories to share?
After the turbulent eighteen months payroll departments have endured, are you doing anything for Halloween for some light relief? Do you have any payroll horror stories you would like to share? Get in touch with the policy team, at [email protected].
Featured in the October 2021 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.