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Spring 1997
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Although there are many areas within a company that can be computerised there are few as vital as the payroll. Because of its legislative aspects you may consider it strange, therefore, that no formal government approval is required for the supply or use of a computerised payroll.
Certainly, both the Inland Revenue and DSS publish details of the rules by which PAYE and NI contributions should be calculated but apart from approval for the use of substitute forms and year end returns on magnetic media, no other approval is required.
Back in the late 1980s the Inland Revenue were encouraging the further use of computerised payroll systems and, having recently developed testing procedures for accounting systems, we approached them and suggested that some checks on payroll systems were desirable. Thus the Inland Revenue and DSS funded the start-up of the independent Payroll Registration Scheme run by the Institute of Data Processing Management (IDPM).
Initially a set of minimum standards for computerised payrolls covering PAYE, NI contributions and year end reporting were developed in conjunction with the government bodies and organisations including the CSSA, BCS (Payroll Group) and IBPM.
A test pack was produced to provide payroll, data processing managers and payroll suppliers a means of running a quality audit on their payroll system to ensure that it met current legislation. The pack comprised of test data and expected results covering a wide range of pay conditions and has been regularly updated to meet current legislation.
In conjunction with this pack an independent vetting and registration scheme was launched. To be accepted onto the IDPM Payroll Register and to remain on it, payroll suppliers had to:
Many payrolls submitted initially had errors that needed to be corrected by the suppliers before being accepted onto the register.
After a few years the DSS approached us and asked us to extend the scheme to include the full processing of Statutory Sick Pay and Maternity Pay. For this extension we agreed a further set of standards with the DSS, developed an additional test pack where all staff were either sick or pregnant and extended the registration scheme to include SSP and SMP.
By the mid 1990’s we had seen many further developments in the payroll arena both from the legislative side and from company pay and deduction schemes. Initially, under the initiative of the British Standards Institute, it was decided to produce a further set of standards, incorporating the earlier IDPM standards, to meet the payroll needs of larger organisations.
A working party was formed with representatives from the government departments and payroll user and supplier groups to develop a higher set of payroll standards. After over a year of discussions a new set of standards was agreed. These include the following areas:
The test pack has been further extended to cover these full standards by the addition of further data sets and by a detailed checklist of features. The registration scheme has also been extended for these full standards. There are now three levels of registration.
You may have seen the IDPM payroll logo in advertisements and sales literature for payrolls and wondered what it means. It means that the payroll displaying this logo has been through a comprehensive independent vetting process and meets the agreed standards.
Does the payroll you are using carry this mark? If not, then ask your supplier if they have applied for this independent vetting.
The test packs are available to both employers and system developers on a yearly subscription basis and are regularly updated to meet the latest legislation. They are invaluable should you be developing or testing a payroll system.
A number of payroll suppliers have been on the register for many years but others have yet to see the benefits of independent verification. We hope that this full set of standards will encourage more suppliers to participate in the scheme and that verification that systems meet these standards will become part of a user requirements.
Registered suppliers are able to display the scheme logo and say they meet standards agreed by the Inland Revenue & DSS. They also benefit from the many hundreds of enquiries that we receive each year from employers looking for acceptable payroll systems. We only recommend those on our register. Details of the scheme are included in the employer guides, payroll magazines and at exhibitions and seminars.
Details of the standards, the test packs and those payrolls currently registered are freely available from the IDPM. We can also provide consultancy assistance in the selection of systems and through payroll selection courses.
The IDPM is a professional body whose aim is to improve the effectiveness, training and professionalism of those engaged in computing. It has a wide range of membership grades for professionals and concentrates on raising standards and on practical advice and assistance for the industry.
John Pidgeon
IDPM Software Evaluation Service
Last Updated: 30 June 1999