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Technology in the Payroll Department

By Michael Busch

One doesn''t normally think about technology when it comes to labor management and payroll processing, but computerized systems give restaurateurs a multitude of options. We''ve come a long way from the days of mechanical time clocks printing the time someone clocks in and out on a paper card and bookkeepers manually calculating tax withholding. However, there are still many successful restaurants managing their labor this way, and high-tech payroll solutions are not for everyone. It is one thing to have access to high-tech solutions; it is another thing to be able to integrate them productively into an operating environment. We are all aware of payroll service bureaus and payroll software that calculates net pay from a gross wage figure. However, with today''s technology much more can be done. Three areas related to payroll where technology is being used today are Time & Attendance, Human Resources, and Electronic Payment Systems.

Time & Attendance

Before you can pay employees, hourly data needs to be collected. This can be done using Time & Attendance software in conjunction with an electronic time clock. These systems can be purchased and run as stand-alone products or in many cases as additions to your Point of Sale system. There are even Internet-based systems that allow a manager to log on from a any location and see who is at working at that moment! Electronic time clocks come in several different shapes and sizes. The simplest devices accept cards with magnetic strips that each employee swipes upon arrival and departure. More complex devices such as a biometric terminal will read an image of an employee''s hand, fingerprint, or even a retina scan. (James Bond would be impressed!) The advantage of the biometric device is that it prevents anyone except the actual employee from punching in or out. The software used in conjunction with these time clocks helps restaurateurs control labor costs by not authorizing wages except during scheduled work time. Most systems allow for a supervisor override when adjustments to the schedule are necessary. Reducing lost time, which results from unauthorized early punching in or late punching out, can generate substantial savings. For example, if a restaurant doesn''t have scheduling software in place, and 50 employees with an average wage of $8.00 per hour punch in 5 minutes before their shift starts and punch out 5 minutes after their shift ends every day, the cost of those "over punches" will be over $23,000 per year!

Human Resources

Many restaurants want to maintain a multitude of information about their employees. A comprehensive Human Resource system goes way beyond storing an employee''s name, address, social security number and marital status. Most systems allow you to track employee benefits, keep a history of previous employment, and document performance reports. Additionally, you can keep records documenting an employee''s educational background, certifications attained, and contact information. You can even store pictures of employees and produce identification badges for security.

Electronic Payment Systems

The expression "cash is king" is not heard very often anymore with the prolific use of credit cards. In the same manner, paying employees with cash is rarely done anymore either. Payment with a check drawn on a bank has been the preferred method for some time. However, more and more restaurants are seeing the benefits of paying their employees electronically. In this manner the employer has a simple reconciliation process because all the electronic payments clear as a single transaction. Until recently, this electronic payment option was only available to employees with a bank account. Now, you can pay anyone using Paycards or Debit cards. These cards can take many forms such as branded (ex: Visa, Mastercard), logoed, signature, or pin based. Each payday the employee''s net pay is put into an account, which is accessible using their card. Most cards give access to their account from any ATM machine. The cost to the employee is usually free if his net pay is deposited to a bank account and usually less than the cost of a check cashing service if it is deposited to a card account. Electronic payment is a way for restaurateurs to improve the reliability of payroll delivery and save money on payroll distribution.

Michael Busch is President of Payroll Computing Services. PCS is a payroll service provider and consultant that specializes in the restaurant industry.

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