Payroll has long been the neglected stepchild of the corporate world, doing its work behind the scenes, unnoticed. Even its place in the company is uncertain. Does it belong in Human Resources or Finance? Most companies have it split between the two departments.
As long as payroll was purely functional, and its role limited to ensuring everyone at the company was paid on time and accurately – it didn't really matter.
But times have changed. And so is payroll's role. Today, payroll can be an enormous asset for CFOs, especially with a recession looming.
Business is more global than ever. Companies are increasingly turning to global payroll providers that offer automated platforms. These companies want the operational excellence the technology delivers by automating payroll and consolidating the data into a single stream - all incredibly valuable. But they end up getting even more.
The new technology made available by these global payroll providers has made payroll operations more efficient, providing tools for lowering costs, reducing risk, expanding visibility, and increasing control. It also saves time. A PWC report indicates that finance teams can save 13% of their week by automating payroll. And we didn't even mention the goldmine of insights hidden in your payroll data.
With all these expanded capabilities, global payroll now belongs squarely in the Finance department, and global payroll analytics deserve a seat at the table when critical financial decisions are made.
Full Visibility With One Click
At most companies, payroll accounts for 50-70% of total expenses, and yet CFOs of multi-national companies typically don't know what they are spending in real-time, or even close to that.
With a manual payroll, all the data is spread over different countries and stored in different ways using different languages and referring to different currencies. That’s a different kind of challenge.
For CFOs and Finance teams to calculate current payroll spending, they would have to collect all the data by hand, standardize the spreadsheets and other documents, and convert the currencies to a single unit. By the time it was done, the numbers probably changed.
Furthermore, if a global company wants to cut spending due to a recession, it will have a hard time deciding where to begin, or if the cuts they want to make are going to have the biggest impact on the bottom line.
With automated global payroll, the spending totals are available with one click. When all of the global payroll data is consolidated into a single view, it's possible to extract a wealth of actionable business analytics. Spending can be compared by year, by location, or even by cost center. The variations are endless. The actions driven by them? Business-changing.
Payroll Data Enhances Financial Planning
Consolidated data also provides the basis for future planning and risk management – the best way to recession-proof your company and react in real-time to changing market conditions. It reveals which of your locations bring the best ROI and which types of employees are the most cost-effective. If there are fluctuations in the business throughout the year, the analytics reveal which months required more spending, so the company can plan for the future.
More advanced systems that employ powerful AI can predict spending with high accuracy. It starts with superior visibility, which is only possible when all global data is consolidated into a single stream.
Control at a Whole New Level
An automated global payroll has built-in controls across the entire system. While many finance managers continue to cling to outdated systems that provide minimal controls, their colleagues at companies using automated global payroll have access to numerous advanced features:
Custom Approval Chain – All payroll data is accessible only to authorized people, on principle of minimum accessibility ("User Roles"). Accessibility can be controlled at any level, allowing some people access to data but not the ability to change it, while others can see only some data that pertains to specific work they are doing.
Audit – An effective automated payroll platform can carry out its own audit of the payroll data to ensure accuracy, matching the numbers at the end of the process with what was expected at the beginning. Discrepancies are flagged immediately, and errors are eliminated before the payroll goes out, ensuring an accurate payroll every time.
Payments – Some payroll companies will have their own payroll payments capabilities, allowing customers to track payments at every stage of the payment process.
Privacy and Security – Since payroll data contains a great deal of sensitive information, payroll companies are obligated to ensure the highest level of security to protect the data and the privacy of the many people who place their trust in it.
Recognizing Global Payroll as a Strategic Asset
In the digital age, global payroll is no longer the unwanted stepchild. It’s the unsung hero bringing a new level of value, efficiency, and insight to the company.
Its value is particularly important during an economic downturn or recession. The only way a CFO can truly assert full control of spending is to see complete reports in real-time.
Although global payroll data is a new world, it contains so much actionable information that it deserves a place at the decision-making table in Finance alongside technologies like Salesforce for sales, NetSuite for management, and HubSpot for marketing.
It's only a matter of time before an automated global payroll provider joins the list – for accounting and planning.