It's time for finance leaders to get serious about payroll-Reading time: 2 Minutes
The role of the modern finance leader is much more than just assessing financial performance and monitoring cashflow. Nowadays, a good financial leader takes stock of the whole organisation to make sure every aspect is aligned to business goals.
By reviewing operations across the entire business, finance leaders get a clear overview of which outputs are contributing to the overall success of the organisation and which areas are leading to inefficiency and losing value.
Quite often, the payroll function is left to the HR department to manage. Yet, agile financial leaders have realised that payroll is business-critical, prioritising investment in technology and automation through SaaS or outsourced solutions.
Reconsidering the power of payroll
During the pandemic, organisation’s payroll operations were stretched to breaking point, and in some cases beyond. Many organisations discovered that on-premise, antiquated payroll systems simply wouldn’t cut it. Yet they still needed to pay their employees accurately and on time.
Payroll is one of the highest value functions in any organisation and employee salaries are often the largest company expenditure. Although it has a people-focused element, payroll involved a great deal of complex calculations and knowledge of tax rules and legislation that might be more efficient sitting with the trusted finance team with input from the HR department.
Historically, organisations fall into the trap of exclusively operating within their teams, rather than with others within their organisation. This can prevent departments from sharing valuable information, which could be helpful to other departments, and the whole business. Yet it pays dividends to consider data and information from a wealth of sources across the business. Bringing the finance, payroll and HR functions together could create advantages for both parties and ultimately create more accurate, compliant and efficient payroll processes.
Reducing risk and liabilities
Payroll is more complex than you might have initially thought. In the last year alone, there have been 24 projects covering different statutory changes announced by the Government. This hundreds of individual work items from user applications through to calculations, to reporting and integrations. Although the 2020/21 tax year has been unusual because of the Brexit result and a global pandemic, having confidence that your organisation has qualified individuals who can monitor and identify change and that interact with government departments directly, or you outsource payroll to a supplier that does.
Organisations must have strong internal policies to avoid any financial risks and promote transparency and audits of payroll data must be conducted regularly. This could fall on the financial team to do, or you could outsource the responsibility by working with a managed payroll provider. A reputable provider will conduct regular audits themselves, so you don’t have to pay for the cost, or the time spent, to do so.
Now, we’re not suggesting finance, payroll and HR need to band together and restructure the organisation. This change can happen without destroying your company’s org chart. You can make huge digital transformation by investing in integrated cloud-based technology to help you collaborate more effectively.
Instead of piecing together data from a variety of sources, finance can smash these siloes with a business-wide integrated approach that aligns with the goals and strategies of other departments. A single solution that is built around a finance architecture will provide a detailed analysis of performance across the whole organisation.
As finance leaders switch to a scenario-planning mindset, the importance of having robust and reliable payroll solution is clear. By utilising integrated technology that aligns your HR and finance systems, you can get a complete picture of the business to help drive your future growth and improve one of the most high-value functions in your business: payroll.