Streamlining School District Payroll

K-12 payroll management can get complicated. With a wide range of necessary roles and functions, HR leaders must manage part-time, full-time, hourly, and salaried employees. Although everyone works toward a single goal of supporting students, staffing complexities can cause headaches. This is why administrators are always on the lookout for ways to streamline their district and school payroll processes.

3 Features to Look for in a Modern School Payroll System

Compared to paper-based systems, modern school accounting software speeds up the payroll process while boosting accuracy. It can efficiently manage the customization of paychecks for individual staff members. Here are three features to look for when considering a modernized payroll system for your school.

1. Automation in School Payroll Software

Most accounting software for schools includes automatic calculation of deductions and withholdings, like taxes, insurance, and retirement contributions. School payroll software also often processes direct deposits to banks, generates tax forms like W-2s, and automatically deducts wage garnishments such as child support or back taxes that a staff member may owe.  

Effective school payroll systems also offer a simple process for employees to change their own deductions or direct deposit information. They also automatically produce paystubs and forms that staff members can view at any time. This automation eliminates time spent on processing forms, scanning, and/or responding to emails within an HR office.

2. Tracking in School Payroll Software

School payroll software should provide seamless tracking of employee wages, hours worked, and requests for time off. The system should also offer year-over-year tracking and reporting functions. Tracking for tax purposes is also a crucial feature, while some school accounting software even tracks employee applications and automates onboarding documentation.

3. Compliance in School Payroll Software

To remain compliant, a school’s payroll system must adhere to federal, state, and local regulations surrounding employee payment. Just as a district is accountable for compliance when it comes to curriculum and instruction, a school accounting system must also remain compliant. Some key areas include payroll tax compliance, ACA compliance, and compliance for COBRA, FMLA, and IRS requirements. Adherence to state labor laws must also be documented. Finally, a school is responsible for maintaining general accuracy and compliance with its own policies.

Why are modern school payroll systems important?

Improving organizational excellence and efficiency stood out as a priority focus area in a scan of U.S. school and district strategic plans that we presented in our 2022 Education Focus Report. The same remains true for 2023 and beyond. Our study found that K-12 organizations have begun to place more emphasis on their systems and financial sustainability post-pandemic. This change is expected to last a few years.

Their renewed focus is understandable. Many schools felt the strain of uncertainties in prior years, and they struggled to adjust any legacy systems. Now, however, many districts are taking advantage of federal funding streams, like ESSER, to invest in their operational systems to untangle workflows, simplify processes, and ensure tighter data security and accuracy.

4 Reasons to Upgrade Your School Payroll Software

Even in a technology-driven world, many districts still rely on manual processes like reviewing handwritten forms, performing manual calculations, and processing similar tasks. This is time-consuming and can lead to inaccuracies. If your school payroll system needs an overhaul, here are four reasons to upgrade your software.

1. Your school accounting system uses paper time cards

Paper timesheets are costly in terms of labor for school HR employees. A well-developed school accounting system can enable employees and supervisors to maintain a systematic timekeeping process that eliminates guesswork from unclear handwriting, variable employee hours, or lost papers.  

Manually entering staff time can also lead to inaccurate reporting that causes an employee to be overpaid or underpaid. Manual time tracking can waste up to 8% of an institution’s total payroll amount due to clerical errors and lack of reliable systems.

2. Your staff need large amounts of time to process school payroll

Across public services like education, workers spend an average of 3.5 hours per day on repetitive computer administration tasks like payroll processing, according to a global study. Payroll management is time-consuming and error-prone whether it’s performed on paper or by manually entering data on a computer. Simply put, without automation, payroll is troublesome and draining. In fact, the same global study showed that data entry is the world’s most hated office task.

3. You worry that your school accounting records might be lost, ruined, or compromised

When records are lost or stored unsafely, this is a security risk. Even a natural disaster can flood an otherwise safe room. Another often-forgotten threat is improper disposal of sensitive papers. In one case, The Georgia Dept. of Human Resources said that paper records of infants born between 4/1/06 and 3/16/07 were tossed without shredding. They contained parents’ social security numbers and medical histories.  

In another case, The Boston Globe used recycled paper containing sensitive financial information for printing and wrapping newspapers, compromising up to 240,000 records. 

Even top-tier organizations like these cannot always keep up with the safety requirements surrounding paper-based documents. They are a constant liability.

4. Your school payroll compliance data is not continually updated

An office that manually processes school accounting paperwork is, in turn, handling school compliance data manually. This can lead to unexpected challenges when it comes to keeping information up-to-date. For example, if an accountant or HR employee simply takes time off, a paper-based office can incur a backlog of entries that leaves room for compliance issues.  

In fact, IRS data shows that 40% of businesses incur costly penalties due to incorrect payroll filing.

3 Key Questions to Ask When Considering School Payroll Software

To streamline payroll processing, you can start a schoolwide conversation about which processes are working and which should be updated. Specifically, consider the following questions:  

• How can we simplify data entry to save time and improve accuracy?  
• Can we centralize and streamline employee tasks?  
• Are benefits and tax deductions calculated automatically? 
  

Systemic changes like these may garner pushback from employees who are used to—and may like—the current system. One way to stay on track is to ensure that your process includes staff and faculty feedback. 

It’s important to stress to employees that this isn’t just about saving the district time and money. You also want to ensure their payroll is being managed efficiently and accurately through automation. A systematic change would also eliminate daily tasks for office workers who log and approve time manually.  

With a modern school payroll system in place, faculty and staff gain more time for the most important part of their job—helping students succeed.

Does PowerSchool have school payroll software?

Most school districts are going digital to reduce the risk of errors, save time, and reduce labor costs. Over time, they see that paperless tracking is efficient and more accurate than manual data entry. 

With PowerSchool payroll solutions built for the unique needs of K-12 education, Payroll/Finance System Products from PowerSchool help districts automate manual tasks, streamline time tracking, reduce human error, increase data safety, and minimize compliance concerns.