Improves Process Efficiency, Data Analysis, Support
Artificial intelligence (AI) technology is quickly growing in the payroll arena. Many employers are either already using it or are in the process of implementing AI within their payroll processes. Today, AI is no longer a process of the future but a process that’s efficient, actively keeping current with technology.
Assists in Repetitive Processes
Payroll departments can use AI in multiple areas, starting with helping with repetitive processes. If a process follows a routine, AI technology will guarantee process efficiency and greater accuracy following all the steps involved. By removing manual input from the process, AI can help ensure the completion of Sarbanes-Oxley (SOX) Act controls, avoid gaps in knowledge transfer that may have been lost between team members, uniformly follow processes, and eliminate emotional decisions from data review. Additionally, during stressful times such as holidays, snow days, or vacation days, AI can occur without missing a beat, as employers are not dependent on manual interaction.
Helps With Data Analysis
AI can assist with data analysis to help predict outcomes. When reviewing large spreadsheets of data with payroll, it is advantageous to use technology to help with the analysis to find anomalies efficiently. For example, when 2+2=4, then AI can take the lead and keep a process moving without intervention. On the other hand, if the data is showing 2+2=5, then AI can complete a deeper dive of the data to confirm accuracy and find errors in the processing. AI is also a scalable process in many situations with payroll. Once a process is designed and built, it can help an organization with growth opportunities without adding headcount.
Use for Data Validation
AI can be used while running payroll looking for outliers (high/low gross pay amounts), incomplete data sets (missing time punches or direct deposit accounts), or
reoccurring data reporting (labor reporting, deduction reporting, and compliance reports).
Using AI technology, the process can be designed to follow some of the payroll professional’s footsteps. It can run the audit report, extract details into a spreadsheet,
filter the file, compare the data to other data fields for exceptions, and email the result with a message to a specific reviewer of what needs to be addressed. Pivot tables, Excel functions, and data analysis are all automated. These can be scheduled to run automatically based on the rules provided. Payroll data validation and audit reports are a great starting point for using AI within payroll processing.
Hands-On Processing Steps
Using AI to create a processing schedule of routine jobs that need to run in sequential order, the same way each time, can be a second area where removing manual intervention will provide consistent streamlined processing. This also allows the ability to increase the scale of jobs processed and the volume of data included without additional work. It creates efficiency through less manual processes and provides greater compliance without missing steps.
Seamless Data Transactions
Another area of enhancement is transactional steps with data that involve taking action as a result of data. An example can be daily banking ACH return files and processing reissued transactions for the same amount through a reissued payment via an AI automated process. AI allows logical steps to flow through a process, creating actions for results to reissue payments.
Extra Support With Chatbots
AI technology takes many forms when supporting payroll, such as chatbots. Chatbot technology assists with data outcomes and information provided in the process. Chatbots utilize large language mode (LLM) technology to respond to user questions asked via text or voice response systems, such as “How do I find my paystub?” or “Where do I find my W-2 form?” or “What is my PTO balance?” The chatbot
responds using a predefined script but fills the blanks with user-specific data.
Payroll professionals get hundreds or thousands of questions like this in a year. Using chatbot technology will save time for the payroll department and the organization and make a 24-hour response available to the user. This increases the support available to the user and provides a quicker, more consistent answer to the questions. In addition, by using AI with chatbot technology, the system “learns” more information by increasing the ability to respond to questions.
Understand AI Limitations
It is always important to ask, “What can’t AI technology do?” and understand the process’s limitations. AI will not replace what a person is thinking or feeling, as it does not have empathy and cannot perform critical thinking processes where a different
outcome is expected. It can, however, follow a predefined process but cannot create a new process on its own, think about the logic of the response, or design a new response to a question.
AI cannot “think outside the box,” but it is excellent at following the steps designed. Payroll professionals should not use AI for processes that require human
judgment, which is not predetermined logically, and if ethics are part of the
decision-making process. Keep this in mind during the decision making
process when exploring options for where to build
AI technology. Understanding the cost to design, build, maintain, and support the process is also important. Upfront costs and reviewing costs should be involved in the analysis of implementing AI.
When considering where to implement AI and how to use it, be sure to consider the pros and cons of different technology tools that are available. The cost may vary by the option or vendor selected and some costs involve a license fee. Also, IT costs should be considered to support the project, and ongoing support should be provided to
update the AI tool when changes are made. Putting together a business case on savings (manual labor cost involved) versus implementation and maintenance is important. This will also help provide a clear path on where to begin with the greatest
process improvement savings first.
In conclusion, using AI technology will help transform the payroll professional’s role, allow scalability with growth, assist with consistency in processes, and provide an opportunity to be a leader in the path of automation. In my career, I have
had the opportunity to experience the savings and processing improvements that AI and chatbot technology have brought to the table. It is a game changer in the world of payroll.
