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Artificial intelligence will see significant change in the payroll space, leading to more accurate payroll entries and better compliance with regulations.
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Compliance or complaints: The evolving role of AI in modern payroll
15 March 2024
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Australia has been slow to adopt artificial intelligence into everyday practice. As the full role that AI will play in society remains unclear, the country is divided around the implications of its integration in everyday practice, prompting Australians to debate the net benefit of introducing the rapidly developing technology into personal and professional settings. It’s clear that AI is set to revolutionise Australian workplaces, with the early impact likely to be seen in back-office technology encouraging more efficient practice.
In payroll and accountancy occupations, evolving AI technology is expected to streamline processes and optimise processing to ensure that payroll entries are accurate and compliant with local regulations. This is particularly essential as employees continue to prioritise remote work arrangements and businesses seek to grow their global footprint, increasing the demand for a global workforce and, subsequently, for global payroll systems.
Payroll is a priority
The benefits of payroll efficiencies are numerous for businesses operating on a local scale, but they become even more critical as businesses seek to upscale and increase their global presence.
An efficient payroll system minimises award-related compliance risks, ensuring that employee payments, invoicing and tax requirements are all addressed appropriately and on time. On a global scale, these efficiencies ensure that payroll processes meet the requirements of local legislation, helping businesses to avoid penalties for non-compliance.
Integrating AI to simplifying compliance
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Risks of human error increase when a business is operating in multiple markets, particularly as legislation shifts in the country where the business is operating. This complexity increases further for organisations operating in industries with complicated award structures.
AI has the potential to bolster existing payroll systems by using learned pattern recognition to rapidly sort through data, finding and correcting - or flagging - anomalies in payroll outputs. This high-speed sorting will not only increase the rate at which payroll functions can be performed, enabling a faster turnaround on invoices and reimbursements, but will also help to protect businesses against fraud and accidental non-compliance.
With integration to global networks, AI would also enable businesses monitor for changes to legislation and payroll regulation in real time, enabling businesses to adapt their processes accordingly.
The developments to be integrated are timely to help businesses operating in Australia to tighten up payroll compliance, following a recent announcement by the Australian Taxation Office that they will be rolling out random audits to crack down on organisations’ tax discrepancies.
Helping humans make the most of their time
Despite fears among Australians that artificial intelligence will replace humans in the workplace and reduce employment opportunities, evidence actually indicates that AI carries more benefit than risk for employees in payroll positions.
Adopting a ‘virtual employee’ role, AI seeks to reduce administrative burden on human employees, freeing them up to complete more productive and fulfilling tasks. In automating time-consuming compliance processes from input through to reporting, employees would be able to increase their meaningful input to the organisation, which increases their overall employment value.
Keeping tech in check
Given the sensitive nature of payroll, which involves the storage and management of employees’ personal data, it’s important for businesses to maintain awareness of risks associated with AI integration. Organisations seeking to adopt AI to support their payroll function need to ensure that they have adequate data privacy protections in place to avoid potential leaks and unauthorised access to sensitive employee information.
By James Ramsay, product manager at global payroll management platform, Remote
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