How systems integration could help transform payroll

Payroll departments have in the main been slow to embrace digital transformation. But as the move to update systems and embrace new forms of automation gathers pace, interest is rising in the benefits of integrating payroll applications with those of other departments such as HR and finance.

Interestingly from a payroll point of view, this situation also has the potential to transform the function from playing a poorly-understood back office role to becoming a key source of business information and performance insights.

Behind every successful payroll run, there have traditionally been hours of manual data collection and verification, adjustments, calculations and the like. But advanced payroll systems and other forms of automation are already transforming these processes by boosting accuracy, security, speed, and output – and integrating systems from related functions has the potential to take things a step further.

For instance, by integrating your global payroll software with the company’s HR information system, it would be possible to access additional employee data, enabling information to be automatically validated in minutes and any critical errors requiring attention to be highlighted. Suddenly a process that used to take days and required payroll staff to engage with members of the HR team could be completed in a fraction of the time with almost no need for time-consuming interaction.

While integrating systems requires the processes and data formats of both functions to undergo some level of standardisation, it can also create opportunities for better mutual understanding and more alignment between the two departments. It likewise presents a fundamental shift in the way payroll is processed and enables access to better quality data for everyone.

For payroll professionals, systems integration has the potential to offer greater opportunities to contribute to, and engage with, the organisation. Our research shows that up to 40% of current payroll activities could be automated in future, a scenario that will free up significant amounts of time for payroll professionals to spend on higher value tasks.

Improving value

Such tasks include improving the efficiency of the overall process, thereby minimising errors or expediting their resolution. Being able to include more complete and accurate data in the payroll run would also make it possible to undertake more comprehensive workforce reporting.

As the quality of data improves so does its value. Moreover, as payroll data becomes more important to the organisation so do the people who understand it. This means that clean and accurate employee data will see the role of payroll professionals expanding beyond pay calculations towards interpreting trends to help improve overall business performance.

In other words, data integrity will act as both the end and the means of payroll innovation and will be the key to unlocking the function’s potential.

Integrating your systems is vital here in that it creates a single source of truth in data terms. Multiple versions of the same files and documents are removed and information is kept accurate and up to date via the master systems. Everyone who requires access can be granted it and changes can be automatically tracked and controlled to ensure transparency and traceability.

Compliance and audits become easier and quicker, reporting is more flexible and accurate, and analytics can be undertaken in real-time to provide instant insights into trends and patterns in the data.

For global payroll functions with complex needs, integrating their system with those of other core functions such as HR and finance has the potential to transform their data into a tool for maintaining compliance and boosting company performance. While doing so can be a major undertaking, it can also generate significant benefits across the business as a whole.

Paul Bartlett

Paul Bartlett is CEO of CloudPay, which provides global payroll and payments managed services to multinational organisations. A global business expert, he has much experience in helping companies improve the efficiency and scalability of their operations using technology and services.