Maintaining Payroll System

Submitted by coleen.yan@edd… on Wed, 05/22/2024 - 15:56

It is a requirement of the legislation to keep confidential all payroll records for each employee.

Back-up and recovery

Every business needs a strong disaster recovery plan. Disaster recovery is the ability to continue work after any number of catastrophic problems, ranging from a computer virus or hacker attack to a natural disaster such as flood, fire, or earthquake. Data disaster recovery often includes making frequent backups of all critical data and records, both digital and hard copies, and storing them in a secure, remote location.

Having a disaster recovery plan in place takes a little time and effort, but the peace of mind it brings and the ability to continue work after the unthinkable are well worth it.

While each electronic payroll system may be a little different, the principles of each are the same — keep documents and data safe and accessible. 

  • Manual: For a manual payroll system, the backup and recovery is manual as well. Considerations need to be made about keeping source files and binders secure and safe. Investments in fireproof cabinets or other measures of disaster mitigation must be planned for and maintained with vigilance. Privacy and disruptions to paying employees on time are at increased risk without serious consideration of recovering quickly from theft, fraud, flood, fire, and earthquake. 
  • Digital: Similar to a manual system, a digital system must be protected by the people who set it up and maintain it. Excel files can be password protected and should be behind a firewall. Digital file backups should be taken on a daily basis, and ideally stored on the cloud with a private business account. Otherwise, hard drives should be used for backups, and stored in a secondary location from the business, ideally one that would not be affected by the same natural disaster. In addition, source files must be protected and secured behind fireproofing or other security measures to protect against theft and destruction. 
    • Working with cloud-based storage and security would provide the most effective security and peace of mind. Different from Cloud-based payroll systems, which include security as part of their feature set, a digital system requires pro-active security management. There are multiple companies in Australia that you can use as off-site backups. Each company will offer something different in regards to services offered so some research will need to be done to find the correct one for the business.
      Some of the options are:
      • OnTheNet are specialists in offsite backup and online data storage, offering only the highest quality services to businesses all over Australia. Having developed leading offsite data backup systems, OnTheNet has been providing incomparable image, data and disaster protection services to its clients, ensuring consistently superior levels of service.
      • Motionwave provide a variety of disaster recovery solutions designed to help your business manage server failures and network outages. If you have any additional questions, please email support@motionwave.com.au
      • DataBank has developed systems and processes specifically designed for the offsite data storage industry. These take into account the industry's unique requirements for routine backup tape cycles. The web-based tracking and media retrieval system is unique to DataBank, and helps clients locate media at any stage of its life.
  • Cloud-based: For most Cloud-based systems, such as MYOB, security and disaster recovery is mostly a breeze. They take full responsibility for backing up business data and providing access at all times.  There are still the paper-based source documents that must be protected just as in the other types of systems. If your business collects these types of documents, they must be protected and kept confidential. 
Sub Topics

MYOB 

  1. Access the  Settings:

    • In MYOB Business, go to the top-right corner of your dashboard and click on the settings icon.
    • From the dropdown, select Users and Permissions to manage your user access.

  2. Create User:

    • Click the User button to send an invitation.
    • Enter the email address of the person you want to invite.
    • Choose the level of access (e.g., Administrator, Payroll, or Custom) based on the role you want them to have.
    • Once the user has accepted the invitation via email, they will gain access to your MYOB file.

  3. Create Advisor:

    • Click the User button to send an invitation.
    • Enter the email address of the person you want to invite.
    • Choose the level of access (e.g., Administrator, Payroll, or Custom) based on the role you want them to have.
    • Once the user has accepted the invitation via email, they will gain access to your MYOB file.

  4. Send the Invitation:

    • After setting up the user’s permissions, click Save and Send Invitation. The user will receive an email to accept and join your MYOB account.

Watch

Watch the video below to find out how to add users in MYOB:

Xero

  1. Access Users Settings:

    • In Xero, click on the Settings menu (top-left of the dashboard).
    • Choose Users under the General Settings section.

  2. Invite a New User:

    • Click the Invite a User button.
    • Enter the person’s email address and select the type of role you want to assign, such as Standard, Invoice Only, or Advisor.

  3. Set Permissions:

    • Choose the specific areas of Xero that the user can access (e.g., Payroll, Bank Reconciliation, Invoices, etc.).
    • You can fine-tune permissions for different functions in Xero based on the user's role within your organization.

  4. Send Invitation:

    • Once the roles and permissions are configured, click Send Invite. The user will receive an email invitation to join and access your Xero account.

Watch

Watch the video below to find out how to add users in Xero:

  Manual Payroll Systems Computerised Payroll Systems
Storage Compactor file storage and/or a separate filing room is usually reserved for keeping the employment records and other documents used in the payroll system. Computerised payroll systems allow businesses to store huge amounts of information in a relative small space
Cost The system requires arrangements for physical storage and requires more than one (1) employee to maintain it. Where the cost of a manual payroll system is relatively small, the associated cost of storage and salaries of employees to operate the system can be very high. Although the cost of buying and maintaining a computerised payroll system is quite high, it does allow saving in other areas. For example, a single employee can process the wages for large numbers of staff relatively quickly.
Security A manual system could potentially be locked into a safe for security. When we start using a computerised system, we also need to implement computerised security protocol. The protocol could include password protection, virus scanners and security for any back up of data.
Time Manual systems are often labour-intensive and time-consuming to operate, with information needing to be manually recorded multiple times in a single pay run. Computers have allowed for information to be carried forward to new periods without the need for it to be duplicated.  The information can also be used to produce multiple reports without the need to re-enter information.

If an employee asks for information in relation to their payment records be made available to landlords, finance companies or other persons, it can only be provided with a signed and dated written letter of authority from the employee that names the individuals or organisations they wish personal information to be shared with, along with details of the specific information to be shared.

This written letter of authority can take on a number of different forms based on the information that the employee is requesting that we share with a third party. An example of a written letter of authority is provided below.

Example of a letter of authorisation

<Employee's name>

<Employee's address>

<Date>

Subject: Release of payroll information

The paymaster <name of the employer>

I have applied for finance approval with <Name of finance company>and need to provide evidence of the content and value of the last <4>weeks wages. When they contact you, could you please provide this information for the period <date from> to <date to>. This may need to include specific information on what is included in the wage payments to me during this period and the likelihood of future continuing employment.

Yours sincerely,

<signature of employee>

Persons with Authority to Access Payroll Information

As you have seen from user roles, there are people who have authority to access private payroll information under specific legislation.

In brief these people include:

  • The employer
  • The employee
  • The person authorised by the employer to process the payroll
  • Fair Work Inspectors
  • Union officials (for the purpose of establishing if a breach has occurred)
  • Law enforcement agencies (on the order of the courts)

 

Take a moment and answer these questions about adding users to MYOB Business. 

Activity 1

Activity: In your trial version of MYOB, add several new users of different types, with different permissions to get a feel for how it works. Use fake email addresses so you don't give anyone a shock.

MYOB takes security seriously. Read about their various policies and targeted practices that keep Payroll and all data safe in MYOB's online environment in the MYOB Trust Centre.

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A person logging into the employee database to manage payroll
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