TECHNOLOGY
Visibility and business insight
Charles Courquin, director at Symatrix, discusses why finance directors need payroll data and support
P ayroll remains an untapped resource for finance directors within many organisations. While payroll is typically the largest single expense for businesses, payroll departments often operate under the radar. They often have little visibility to finance directors who are more engaged on the other challenges across the business and are focused on where investments need to be and where the organisation is going to grow. There are also technical obstacles standing in the way of the finance director and the payroll department working in tandem, especially where organisations are operating separate outsourced payroll systems that are poorly integrated with human resources (HR) and the rest of the business. Scaling the barriers through data We are now seeing signs of a new coming together of finance and payroll departments. In cash-strapped businesses, finance directors are looking at payroll as a potential source of cost savings. Finance directors are saying to themselves: “What can I do to keep the optimal number of staff I need in place to keep the business ticking over and how can I reduce operational costs?”. In better performing businesses, finance teams increasingly look at employees as high value assets. We are seeing them turning to HR to gauge ways on how they can increase productivity and improve returns on investment and are leveraging integrated HR/payroll systems to support this measure. In making this move, finance directors are dependent on data to help drive their business forecasting and to determine the impact of the changes. However, payroll generates a lot of data so creating a challenge for finance directors consolidating the elements they want into their overall forecast. Though many cloud and enterprise
resource planning tools have standard dashboards in place that help consolidate the explosion of data, work still needs to be done to refine the data so they can focus on what matters. The key to this goes back to what is the organisation’s strategic plan for its people. ...finance directors are dependent on data to help drive Finance directors need to decide what the critical elements are that will help them measure the performance of the business. That will define the data they will need to pull into their budget and plan what the business is going to do going forward. So, what are the insights they could potentially get from integration of the payroll data into business forecasting? Typically, the bigger the business the greater the insight needed. A UK business focused on just UK employees with one set of compliance issues and one set of data for one cohort, will typically be easier to understand than a global business in this respect. Benefits to the finance director Finance directors like visibility, efficiency and control. If they can get visibility of where their costs are, they can more efficiently control and reduce them. They can use that newfound insight in payroll to help deliver an overview of financial status, help with budget forecasting but also provide invaluable data to support strategic decision-making, including how to shape new recruitment drives or scale-up operations to move into new geographies, for example. their business forecasting...
The need for visibility and efficiency is further driving this alignment between finance, HR and payroll. Finance directors who are linked into the HR and payroll departments better understand the legislation area, and the need for compliance. They are more aware of the impact of covid on the business, including through furloughing, and what the ramp-up needs to look like when employees return full-time. That’s where that element of control comes into the picture. As companies become global, they are more reliant on their local HR teams because those teams have greater knowledge in compliance and legislation relating to the workforce. Finance directors need to think of the risks they could potentially be running into if they do not fully understand the compliance issues, which can change rapidly at any time, particularly in these times. Technology is helping this process of driving visibility, efficiency and control for the finance director. The cloud is part of this, of course. A cloud solution can bring great flexibility, scalability and operational efficiency to any organisation, but it needs to be carefully managed to meet the evolving needs of business and finance so that it becomes not just a functional solution but a more broadly operational one that can bring great benefits to HR, payroll, finance and the broader business operating in tandem. Today, we are living in a world populated by cloud-based, connected, integrated systems. We are moving from the need to produce a pack of manual paper reports to show certain key performance indicators, to a more value-added real time approach, based on proactive dashboards with drill- down menus that deliver real business insight. That evolution is providing visibility, efficiency and control for the finance director and real growth for the business moving forwards. n
| Professional in Payroll, Pensions and Reward | May 2021 | Issue 70 42
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