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Human resources (HR) and finance Is payroll part of the HR department or the finance department, or should it be a department in its own right? This is a long-standing debate, and a discussion that won’t be explored in this article. However, wherever the payroll department sits within an organisation, HR and finance are key stakeholders. Communication with these departments is vital to ensure accurate and timely payroll processing. HR will provide much of the employee source data; their contractual terms and conditions, leave dates, pay changes, parental leave information. Finance will require much of the payroll output, labour costs broken down by cost centre, values for pay as you earn (PAYE), and additional employer costs such as National Insurance, pensions and benefits in kind. The issues created by ‘silo’ mentalities are limitless, and, therefore, it’s essential teams work collaboratively to avoid this The flow of data between payroll, HR and finance is critical. Sometimes, departments can be guilty of working with a ‘silo’ mentality. This is where processes are seen as being ‘owned’ within each department, with minimal consideration given to the requirements and expectations of other stakeholders involved in the process. Let’s take the example of a new starter. HR need to recruit the new starter, confirm a start date, and issue a contract of employment. If they do so without consideration of payroll deadlines, the new starter may unknowingly miss the payroll deadline. If payroll don’t understand where the new Wherever the payroll department sits within an organisation, human resources and finance are key stakeholders
Maintaining a good relationship between system provider and payroll team will help identify where problems do occur, and how they can be overcome. It will also create visibility of software improvements the payroll team may be able to capitalise on. Software providers continuously develop their solutions, with many systems offering four or more upgrades each tax year, with both functional and statutory upgrades. If payroll do not maintain communication and strong relationships with their software provider, they risk limiting their knowledge and hindering the capability of what the software can do. This could introduce inefficiencies in processes and create additional manual tasks that are unnecessary if the software is used to its full potential. Clients To a payroll service provider, the client is a key stakeholder. The payroll team must carefully balance the needs of the clients against the service agreements set out. Providing great customer service is likely to keep clients happy, but if customer service extends beyond the parameters of the contract, it could likely come at a cost to the service provider. Communication is vital to ensure expectations are agreed on at the outset, and clients know what service levels they can expect from their payroll service provider. What steps can you take to improve communication with your stakeholders in the new tax year? The power of communication This article is by no means an exhaustive list of payroll stakeholders. In fact, many, such as Her Majesty’s Revenue and Customs, and internal and external auditors are notably absent. The central message, however, is that, regardless of the stakeholder, communication is key to building and maintaining positive relationships, service levels and outputs. If payroll operate in isolation, they will not achieve success. A successful payroll team is built on a foundation of great communication. What steps can you take to improve communication with your stakeholders in the new tax year? n
starter should be costed to, they may select the wrong cost code, and create problems for finance to reallocate or recharge the costs. The issues created by ‘silo’ mentalities are limitless, and, therefore, it’s essential teams work collaboratively to avoid this. Effective communication between HR, finance and payroll should include clear, transparent and joined-up processes. Each department should understand their roles and the expectations of others within the process. This approach can be challenging and can often require a cultural shift where departments have historically worked against, rather than with, each other. However, if payroll want to become a successful strategic partner in any organisation, great communication and joint processes are central to their success. Payroll as a service Those who provide payroll as a service on behalf of others also have key internal stakeholders who can support the delivery of great payroll services. Just as the size of in-house teams can vary, outsourced payroll teams can start from just one team member, and can reach very large numbers. The organisational structure will often vary, but great communication is still essential. Payroll can work closely with implementation teams, international teams (if operating across the globe), and quality control teams, to name a few. Many payroll clients engage in additional services, and maintaining great relationships across the teams the client works with can be key to successful client relationships. The payroll team must carefully balance the needs of the clients against the service agreements set out
External Stakeholders Systems providers Payroll is not possible without the
support of a system that calculates PAYE obligations and delivers compliance. A payroll system can be seen as the source of many problems or multiple benefits, depending on the system used, how it was implemented and the team’s knowledge of how the system works.
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| Professional in Payroll, Pensions and Reward |
Issue 78 | March 2022
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