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Using AI Technology to Improve Payroll Efficiency

BY: Barb Muellerleile, CPP | 05/26/22

Artificial Intelligence (AI), and other forms of automated technology, are knocking on the doors of many payroll departments that are considering ways to streamline their payroll processing. Using robotic process automation (RPA), chatbots (BOTs), and automated technology via “machine learning” is no longer a random thought or a prediction of the future; it’s already a reality for many organizations. So, opening that door to entertain the latest ideas in technology such as these may reduce the time involved in your operations, create savings for your organization, and streamline processes for us—the payroll professionals. But, before you dive into this technology, you need to complete several steps first.

Know Technology’s Benefits

The first step of using any technology is to understand the many benefits these technologies can provide. Although distinct types of machine learning often have a similar outcome, they may have different platforms behind them or different support they can provide to the user. Through the machine learning process, the AI technology behind the process—typically a computer algorithm—will be able to analyze data and determine the outcome. It can also mimic or copy the steps that a person would complete and provide a better consistent result. If a process follows specific steps and a pattern, the system will be able to copy the pattern, the steps involved, and provide the result.

For a payroll department that processes volumes of the same repetitive steps each year, using AI technology guarantees a step is completed the same way every time, at the same time required, with the same result. This ensures greater accuracy in the process. Some of the other benefits this technology brings includes the following:

  • Ensures that SOX controls are completed
  • Reduces the knowledge lost between cross-training of team members
  • Helps to ensure consistent processes are complete the same way every time
  • Allows for holidays, vacation days, or snow days to occur without a hitch, because the AI technology has these steps covered

Once this process is designed and built, the technology can take over to help an organization with growing scalability and may even reduce headcount in a department.

Let Technology Do the Repetitive Tasks

Taking time to analyze processes that are time consuming with repetitive steps is a fantastic way to begin reviewing processes that may be suitable candidates for RPA technology. For example, many payroll departments have the task of data validation while running payroll, such as looking for outliers like high/low gross pay amounts, incomplete data like missing time punches, or even trying to find that needle in the haystack balancing data files.

RPA technology processes can be designed to follow in the footsteps of the payroll professional and complete those repetitive tasks such as the following:

  • Run the audit report
  • Extract the audit report into an Excel file and filter the file
  • Compare the data in the file to other data fields
  • Extract additional data that it has discovered and email the result with a message to a specific reviewer

These RPA processes can all be scheduled to run automatically based on the rules that are provided.

Another area of opportunity is using BOT technology. This is when a user types in a question or speaks the question to the computer or mobile device, and the BOT responds with the answer. A fitting example of this in the payroll world today is “How do I find my paystub?” or “Where do I find my W-2?” or “What is my PTO balance?”

When the system responds, it has been given a predefined script to read and provide to the user, but it can pull specific data based on the user asking the question. Many payroll professionals get hundreds or even thousands of questions like this in a single year, but using BOT technology will save time for the payroll department and the organization and be a 24-hour response mechanism that is available to the user. This increases the support available to the user and provides a quicker, consistent answer to the questions.

Reading all the information in this article sounds too good to be true, but if a payroll professional is looking at these opportunities, it will provide them savings to bring to the leadership table and provide innovative support for the organization’s employees. AI technology should not be ignored by payroll and should be on every payroll professional’s road map.

Limitations of Technology

Next, it is important to ask the question, “What can’t AI technology do?” and understand the limitations of the process. Automated processes will not replace what a person is thinking or feeling, it does not have empathy, and it cannot perform critical thinking processes. Technology can follow a predefined process but it can’t create a new process, it can’t think about the logic of the response, or design a new response to a question. It truly does not “think outside the box,” but it is excellent at following the steps designed. Automated technology should not be used for processes that involve critical thinking, need a judgement decision that is not predetermined logic, and should not be used if ethics are part of the decision-making process. It is also important to understand the upfront cost to design and build the processes, maintain them, and support them.

According to the 2021 Gartner report, “Magic Quadrant for Robotic Process Automation,” the software leaders in this technology space are UiPath, Automation Anywhere, Blue Prism, and Microsoft. Understanding the costs for each of these vendors and what will work best for your organization is an area of opportunity to be explored in payroll with your IT business partner.

In conclusion, AI technology, RPA, chatbots, and other automation tools are the door to the future for payroll professionals and provide you with an opportunity to be a leader in the path of automation.


Barb Muellerleile, CPP, is the Senior Director of Finance and Payroll at Panera Bread. She is also a member of the APA’s Board of Contributing Writers for PAYTECH, a volunteer on the APA’s Certification Board, CHAMPS Committee, Nominating, and Elections Committee, and the Retail Best Practices Subcommittee of the Strategic Payroll Leadership Task Force (SPLTF).