Powering payroll with transformational technology

01 October 2019

This article was featured in the October 2019 issue of the magazine. 

Steven Watmore, payroll and HR product manager at Sage, sets out the case for cloud computing

It’s no secret that a rise in cloud computing has created a new paradigm for the distributed workforce. It’s now becoming more commonplace for workers to operate in different countries to the residence of their employer, and for companies to operate multiple regions with a single finance function at head office. 

Of course, this has ramifications for payroll, in the same way that the impact of the global regulatory and political landscapes does, regardless of where you’re located. The recent introduction of the General Data Protection Regulation and the impending exit of the UK from Europe are two good examples. Regulation doesn’t have to be passed in your locality to have a knock-on effect on how you operate – just because head office is in the USA, for example, doesn’t mean that European Union regulations aren’t a live challenge.

So, as businesses look to grow and navigate this complexity, how can they make smarter use of their data to drive efficient cross-border collaboration and compete in a global market?

 

A legacy approach to payroll

It starts with the ability to act at speed in response to changing requirements, taking a transformational, rather than transactional, approach. When payroll is done effectively it can benefit the entire business, not just the payroll function. One of the key issues at the moment is that without the right tools and culture, payroll can be transactional and time-consuming, failing to offer actionable insight that can be used to inform business decision-making. 

Let’s consider industries where frequent payroll updates are needed, such as in hospitality. In an industry where employees are doing hourly, shift-based work, the burden of payroll on the employer can be huge. Having a weekly payroll where you’ve got a clocking system that automatically generates payments is fine – but if you’ve got manual timesheets that have to be collected and sent off, that’s another story.

Automation in technology is moving to try and alleviate this issue. In fact, automation of data transfer and collection is one of the biggest changes going on right now and should be one of the biggest priorities for businesses moving forwards. After all, generating and updating data has always been the priority for ‘getting the job done’, but what if this could be reversed so that companies were focused on using the data insight they have to cut costs, empower staff and enhance performance?

 

...transforming the payroll industry with new tools...

 

The power to transform

Technology is transforming the payroll industry with new tools to improve accuracy, make compliance management easier, and use simpler methods for filing and reporting. It’s time that businesses took note. 

Investing in the right technologies will help payroll leaders focus on key business priorities. Whether it’s supporting the business to drive new revenue streams, improving internal processes, focusing on strategic objectives or improving the employee experience. 

Today, powerful analytics tools are available to help organisations quickly pinpoint discrepancies in tax reporting, avoidable non-compliance fees or staff requirements that can help cut costs. Likewise, increased automation processing can reduce the need for specialist staff (compliance), improve data accuracy and eliminate repetitive, time-consuming tasks, so that payroll leaders can focus on reporting insights that will help them become more attractive as an employer for example.

In order to unlock the benefits of these emerging technologies, it’s important to have a clear view over all relevant data across the organisation. By implementing holistic enterprise resource planning (ERP) systems, companies can unify different functions within the business, which in turn allows those functions to benefit from each other’s data. With the right ERP in place, payroll can generate insights about the wider business beyond the daily number crunching, generating more value for employees and the company.

 

Intelligence is the key to action 

By prioritising updates to their payroll technology and growing the power of payroll intelligence, businesses can start treating payroll as an exercise that benefits the entire business operation. Acting on the crucial insights into staffing capacity and performance, such as the potential cost and impact of overtime, or any added tax or compliance implications, payroll can more effectively weigh their options more accurately, influence pricing accordingly, and facilitate growth for the organisation.

Technology has the power to address unique challenges and opportunities for growing and diversifying a workforce that will empower your organisation. After all, understanding accurate costs and risks associated with employment in differing locations is critical for planning and hiring. 

By prioritising these advancements on a unified technology platform, companies can make sure that their payroll teams are generating maximum value for employees – no matter where they’re based. In a global market, it’s important to have the same high standards for every office in the network – the cloud is the key to achieving that goal.