5 min If you are running payroll for a business in Australia, then nothing will seem wrong until it actually goes wrong, and you see hidden inefficiencies, compliance gaps, or cost overruns. Traditional audits are geared towards discovering errors, which is why businesses are fighting fires all the time, trying to stay ahead of the curve.
A payroll audit checklist frameworked by the 7 E’s turns compliance checking into a viable instrument that operates well in optimisation. It enables organizations to become more efficient, save costs, and uncover actionable insights.
Why Traditional Payroll Audit Checklists Fall Short
A lot of Australian organisations regard payroll audits as a box-ticking exercise. Finance teams madly dash for documentation, the HR department frets about Fair Work compliance, and everyone just prays the auditors come back with fewer than a handful of issues.
Your payroll may tick the boxes for compliance, yet eat up resources, cause bottlenecks, or not offer insights for more informed decisions. For hyper-growing companies, these holes are expensive and disruptive.
The 7 E’s Framework: What it Takes to Go Beyond Compliance
The 7 E’s framework transforms a payroll audit checklist into a strategic asset. And it speaks to more than just compliance, but also efficiency, fairness, and adaptability. Here are descriptions of each element:
Effectiveness Evaluation
Your payroll system should produce results, not merely manage transactions.
Can it calculate overtime, allowances, leave, or multi-state employees?
Example: A system that is a great fit for 50 staff may be too limited by the time you reach 200, and staff resort to manual countermeasures that enable workarounds, but also delays and errors.
Efficiency Optimisation
Assess time, cost, and effort. Find repetitive, physical things that can be automated.
Example: By automating repetitive payroll tasks, you reduce errors and liberate the team from administrative work for more strategic tasks.
Economy Assessment
Monitor value-for-money by auditing software licences, third-party fees, and “in-house” costs.
Example: House cleaning, abandoned modules, or renegotiating with the vendor can drive this expense way down.
Excellence Standards
Establish quality and timeliness, set up benchmarks of accuracy.
Examples: Monitor error incurred, correction frequency, and employee satisfaction for the purpose of achieving consistent performance during high season or the absence of labor.
Ethics Integration
Stop fraud and mistakes in their tracks with employee existence validation, approval workflow, and smart segregation of duties.
Tip: To avoid legal exposure, make sure you’re compliant with Fair Work requirements.
Equity Measurement
Promote equitable entitlements for all categories of colleagues – salary, holidays, benefits, and more.
Example: Conducting equity audits on a regular basis can help avoid discrepancies between positions, geographical areas, and work arrangements.
Environmental Alignment
Make sure the payroll is in compliance with laws and other business systems and is reflecting the market rates.
Example: It needs to be able to adapt to legislative changes and integrate with HR and accounting systems to avoid expensive downtime.
Implementing the Payroll Audit Checklist
As a payroll audit checklist derived from the 7 E’s, it performs best when seen as a continuous process as opposed to a one-time activity.
- Begin with a test of effectiveness to better understand where you are now.
- Try to concentrate on one or two E’s per quarter so you don’t wear out your auditors.
- Record changes and tweak processes over time.
Move Forward with Confidence
A 7 E’s-based payroll audit checklist converts compliance into a strategic weapon. By managing their own Australian payroll or using payroll services in Australia, businesses can identify potential risks, streamline processes, and increase productivity.
Ready to optimise your payroll? Our Payroll solutions Australia have been uniquely crafted with unparalleled operational payroll knowledge and capability.
Let us help you implement a 7 E’s approach and get the best out of your payroll.
