Nowhere To Go But DownPosted: February 20, 2012
A few years ago I was receiving my annual evaluation and was disappointed in the overall rating. I thought I had done several things during the year to deserve a higher rating than I received, but I decided the best course of action was not to question the rating, but instead to question what it would take to receive a higher rating in the future. That’s when the Controller said “there is nothing you can do to receive a higher rating, all you can do is mess up and get an even lower rating.” After my initial disappointment to hear such a thing, I realized that attitude applies to a lot of critical areas in a Finance and Accounting group.
Probably the most obvious example is Payroll. No one in Payroll ever gets noticed when the deposits are made on time, the withholdings are paid to the right parties (especially the government), the W-2s are issued and the journal entries get the expenses to the right budget codes. But make a $10 mistake on someone’s pay and the calls don’t stop until it is resolved. The problem with payroll is that you are sometimes at the mercy of Congress and the IRS.
Take the recent example of the last minute changes to the social security tax withholding rates. The two month extension at the end of 2011 as enacted so late that many payroll systems were not able to update their tax tables in time for the first paychecks of the year. This meant that too much was withheld from the first paycheck and that had to be corrected by lowering the withholding rate below the statutory 4.2% for the second paycheck of the year. Volatility in paychecks is not a good thing and despite all of the proactive communication efforts, I am sure the calls about a mistake in withholdings came into every Payroll office across the country.
Now congress is at it again. As of this writing a compromise has been reached to extend the lower tax rate for the remainder of the year. No matter what your political leanings, the problem with these last minute changes is that they simply cannot be implemented in a timely basis by the payroll vendors and employers. So once again Payroll departments will be playing catch up with withholdings and spending extra time and money to tell everyone the paychecks are really right straight because Congress can’t get their act together in any kind of timely basis.
The surest way to get someone mad at you is to make them look bad through no fault of their own. When it comes Payroll departments, Congress has done a great job of that this year…And Congress wonders why people in business (not to mention everyone else if you believe the polls) have such a low opinion of them.