AI in payroll management

Artificial intelligence (AI) isn’t widespread in the payroll industry—yet. Today, 6% of payroll professionals report using some form of AI in their day-to-day jobs, but more than 80% of those same respondents believe the technology will transform the industry.

Certainly, AI has the potential to innovate payroll processes, mainly through automating repetitive tasks and reducing human error. However, employers must understand the risks and limitations of AI payroll software before adopting such technology.

How Can AI Be Used in Payroll Management

Like many other professions, Payroll is looking at how AI can enhance the process of making sure everyone is paid accurately and on time. Many providers are already trialling and looking at how this form of technology can work alongside the experienced payroller capturing all the nuances of legislation within the payroll process.

The automation of the repetitive tasks is a good starting point and as many of these are a process AI would sit well within this area of payroll.

There is still a lot of concern across the industry in providing complete autonomy as we all know that in the real world very few payrolls constantly have no changes month on month.

Flags would have to be in place to capture these changes and this would require human intervention.

Automated systems are very difficult to correct or make changes too and this is something else the technology needs to take into consideration. Payroll will always need the ability to make previous pay period corrections and submit these to HMRC.

Payroll is very sensitive and can have huge implications if it goes wrong for the employee and employer. You have to trust what ever payroll process is in place, and it should not be a case of looking for the cheapest option.

Legislation is key and if compliance is not adhered too this can be another cost to the employer. Human contact is still required to be able to talk to and get professional advice on situations as they arise.

It is a worry that employers will look to cost save and opt for a fully automated system without realising the potential pit falls of this decision.

Over the coming years the technology will undoubtedly be an asset to payroll, however the complexity of legislation will always require an experienced human to work along side it. Together they will be the perfect team.

Retaining Human Involvement in Payroll Management

Organisations, particularly smaller businesses, may consider AI payroll software a cost-effective solution. However, these businesses must weigh the potential cost savings against the benefits of working with an independent payroll bureau.

For example, bureaus typically use robust, accredited software and employ payroll professionals who have unique expertise. Payroll teams aren’t just there to process your payroll; they can also inform you of policy changes, provide recommendations for complex payroll issues, and offer a deeper understanding of compliance.

Furthermore, organisations shouldn’t overlook AI software’s data security risks, especially when handling sensitive employee information. An accredited payroll bureau has the advantage of having secure systems to manage data and reduce cybersecurity risks.

Our Advice for Employers

Our advice to employers looking to adopt or switch to a more robust payroll management system is always to consider their specific needs. In some cases, automated payroll management software may be a suitable choice, especially if you only have a small number of employees or simple payroll needs.

However, organisations should consider employing the services of a payroll bureau. Working with a payroll bureau that combines advanced software with professional oversight can safeguard against errors and ensure compliance with complex regulations.

Ultimately, while AI will become more widespread in payroll processes, businesses must recognise the indispensable role of human expertise.

Payroll isn’t just about data entry and payslips. Employing accredited payroll professionals assures employers that they fully comply with payroll law and won’t see a heavy fine from HMRC anytime soon.

If you’re looking for a Bacs-approved payroll bureau with expertise in UK and international payroll, contact the award-winning PKF Francis Clark payroll team to learn how we can help.