Understanding time matters when you run a payroll bureau. You need to know how long payrolls take to process, whether that bears any resemblance to how long you expected them to take, which clients consume more resources than others and where additional work is being generated. You also need to understand how that translates into capacity, recoverable work, revenue and ultimately the economics of running the bureau.
Timesheets have traditionally helped provide that control and, in many businesses, they will continue to have a role. There will always be activity outside the payroll workflow that needs recording, whether that is internal work, projects, meetings, training, non-chargeable activity or something else the operational system cannot reasonably know about.
But a lot of the information we ask people to put onto a timesheet relates to activity that the software already tracks. That raises a simple question – why are we asking people to create data the software already knows? We’ve looked at this question in more detail elsewhere, exploring how better orchestration can remove the need for manual workarounds across the payroll bureau.
The payroll itself can tell us a lot
Think about a normal payroll cycle. Your processor does the work required to prepare the payroll and uploads the first version for the client to review. That point matters because it represents the initial effort required to deliver the payroll, rather than simply the additional work that might follow.
Perhaps the client approves it immediately. Perhaps they come back with changes, and another version is needed, with further amendments before final approval. Each of those events tells us something, and because Luna understands the workflow, it can capture time as part of the process, starting with the first payroll uploaded for review and then adding the effort associated with subsequent versions or variations.
Time on its own, however, only tells part of the story. If the workflow also captures the reason another version was needed, we begin to understand not just how much resource the payroll consumed, but why. That is when time recording becomes much more useful.
Three hours isn’t always three hours
Imagine two payrolls that were expected to take two hours but actually took three. From a traditional time report, they may look exactly the same, because both are an hour over forecast, yet operationally they could be telling us two completely different things.
One payroll may simply have become more complex as the client’s workforce has grown, with the initial processing now taking three hours and suggesting that the expected time or underlying pricing needs reviewing. The other may have been completed within the expected two hours, but the client then requested a series of changes that generated another hour of work.
The total time is identical; the management information is not. If we know when the time was incurred and why, we can distinguish genuine processing effort from rework, identify patterns in client behaviour, improve future forecasts and make better decisions about pricing, service levels and process.
Across a single payroll, that is useful. Across an entire bureau, repeated month after month, it starts to show which clients are changing, where forecasts are wrong, which types of variation create the most additional work and where capacity is really being consumed.
Capture recoverable work while the context is still clear
There is an equally important commercial dimension. Anyone who has run a service business knows that additional work is easiest to identify when it is actually happening. A client asks for something outside the normal service, information arrives late, another payroll version is requested, or a small change becomes a more substantial piece of work. At that point, everybody knows what happened.
By billing time, perhaps several weeks later, the picture can be less clear. Someone needs to review timesheets, emails or notes, work out what the additional time related to and then decide whether it should be charged. That creates administration, but it also creates leakage.
Luna gives us the opportunity to move that decision much closer to the work itself. Configurable prompts can recognise situations where additional work may be recoverable and capture the relevant information there and then. That does not mean automatically charging a client every time another version of a payroll is produced; there will always be judgement involved, and the bureau needs to remain in control of the commercial relationship.
What it does mean is that the information required to make that judgement is captured at source, while it is clear what happened and why. Depending on the bureau’s rules, an item could move towards billing automatically or simply be placed into a billing review for somebody to make the final decision.
Billing shouldn’t have to start at billing time
Another consequence of capturing information this way is that the bill can be easier to produce and may go out sooner. Traditionally, billing can involve reconstructing activity after the work has finished, with time reviewed, extras identified, queries resolved and decisions made before the invoice can finally be produced.
If much of that information has already been collected naturally during the payroll cycle, much of the work required to create the bill has already happened too. The initial processing activity is known, additional work has been captured, reasons for variations are available and potentially recoverable items have already been identified and, where appropriate, reviewed.
Billing then becomes the final step in the payroll delivery process rather than the beginning of another administrative exercise. For a bureau processing hundreds or thousands of payrolls, reducing the effort needed to prepare bills and shortening the gap between doing the work and charging for it can make a meaningful difference. This is the connected workflow behind LunaCore’s integrated bureau management and billing, where payroll activity and billing sit within a single system rather than being reconstructed afterwards.
Better information about the job
At an individual payroll level, this creates a much clearer picture of efficiency and recovery. You can compare actual processing time with forecast time and understand where the difference arose, see whether additional effort occurred before or after the initial payroll was delivered for review, understand how many variations were required and why they happened, and identify which of those variations
generated potentially recoverable work.
That gives managers better information to improve the job itself. Perhaps the processing forecast needs adjusting, the client needs a conversation about how and when they provide information, repeated additional work suggests the service should be repriced, or the data shows that a client previously thought to be difficult is actually being delivered very efficiently. The point is that the decision is based on what happened rather than assumption.
Then look across the bureau
The really interesting part comes when you aggregate the same information. Instead of understanding one payroll, management can see how the whole business operates, with recoverable time considered by employee, team, or department; actual processing performance compared with forecast; and client trends tracked over months or years rather than as isolated periods.
You can see where additional work is being generated, the reasons behind it and whether it is being successfully converted into additional billing. Revenue can be viewed alongside the resource required to generate it, creating better insight into client economics, while operational activity can provide a much richer view of capacity and utilisation than a collection of retrospective time entries alone.
Over time, that helps answer more valuable management questions: which clients are becoming more expensive to service, where are forecasts consistently wrong, what is driving rework, which teams have capacity, where is additional billing being identified and where might it be missed, and where does a client conversation or pricing review need to happen?
These are management questions rather than time-recording questions, and that is really the point. It’s the difference between running the payroll business, not just the payroll calculation.
Timesheets still have their place
This is not an argument that every timesheet should disappear tomorrow. If someone spends three hours on an internal project, attends a management meeting or undertakes work outside Luna’s operational workflow, the software cannot simply invent that information. There may be good reasons to continue recording it through timesheets.
The opportunity is to stop asking people to manually recreate information that has already been generated by the work they are doing. Where Luna can capture that information intuitively and in real time, the team should not need to record it somewhere else simply because that is how management information has traditionally been created.
Better still, the information can include context that a conventional timesheet entry rarely provides. Not simply how long that task took, but what happened, when it happened, why it happened, whether it was expected, whether it was recoverable and what happened to that recovery. Put all of that together and time becomes a much more powerful management tool.
Don’t ask people to create data the software should already know
That principle goes well beyond timesheets. One of the things we want Luna to do is remove administrative processes where useful information can be created naturally by operating the bureau. The system should know where a payroll is in the process because the work is happening within it; it should know when another version has been created, which tasks have been completed and where exceptions have occurred, and wherever possible it should connect those events to their operational and commercial meaning.
The more of that information we can capture as a natural consequence of doing the work, the less we need talented payroll professionals spending their time reporting on the work afterwards, while the management information becomes richer at the same time.
So we are certainly not suggesting that payroll bureaus should care less about time, recovery or control. Quite the opposite: we think there is now a better way to understand all three.
If you are interested in discussing how you can improve your bureau management efficiency and oversight, get in touch.