You’ll never know what you don’t know. Unless you make a change and look to uncover more information. As a CFO, if you stop and ask yourself what you know when it comes to your global payroll spend, it’s likely you could say how much you pay employees, what countries you have payroll in, and how much your payroll service provider is charging. But there’s so much more to global payroll in terms of cost association, but also in the value that payroll can add to an organization.
On average, we see that payroll amounts to between 60-70% of an organization’s total operating costs. It therefore goes without saying that it is in the interest of CFO’s to possess razor-sharp clarity into where this money is being spent. Ultimately arming businesses with information that can showcase where efficiencies and reductions in spend can be achieved.
Too often this is not the case, with global payroll containing multiple hidden costs. It can be a labyrinthine process with as many as 7 disparate systems in operation in a single organization. Global payroll must also contend with a lack of standardization across processes and regions as a result of zero integration with HR and Financial Management systems.
As a result of all this, CFO’s have next to no transparency of global payroll costs and can never fully assess and evaluate workforce data accurately until underlying issues are properly addressed.
Where to begin…
The power of one
Implementing and leveraging a single global payroll platform for your business’s payroll needs can alleviate global payroll challenges, giving you complete oversight. With this single source of global payroll data, a CFO has real-time access to comprehensive and cohesive reporting and analytics. This in turn significantly strengthens the internal controls within your organization. In addition, we find that up to 70% of global payroll processes can be automated by consolidating the management of payrolls globally onto one single platform. This automation of processes allows your people to spend less time carrying out manual tasks and more time on value add activities that will enhance both their careers and your ability to make decisions based on concrete payroll data evidence.
Gaining a competitive advantage: The benefits of a global unified payroll platform
Simply put, there are many.
Global oversight and standardization
- Access to complete consolidation of global payroll into a single currency makes cost comparison so much simpler.
- Finance can filter down to a specific country, year, and month, to view costs for a specific division or legal entity – and even down to a particular person if such granularity is needed for analysis of out of the ordinary variances that might occur – giving complete transparency.
- Achieve corporate alignment via 1 repository of data that multiple departments across the organization can utilize, which also adds to the return on investment.
- By generating analytics that provide understanding around what drives workforce spikes and trends.
- Producing data that will monitor all units of the organization and identify headcount synergies.
Time and cost savings
Based on our work with leading international brands and the value realization they have achieved, we see that:
- Full integration between HRIS, payroll and ERP systems reduces duplication of effort and risk of error. This also comes with a time saving as manual data entry is reduced by 50%.
- General ledger entries can be fully automated resulting in 100% time reduction.
- Purpose-built global payroll platforms reduce the time it takes to create reports by 95%.
- On average, monthly payroll processing can be reduced by 6 days in each country.
- The automation of global payments reduces exchange rate risk and bank charges.
- Highlighting variances that look out of the ordinary and may be associated with payroll errors or overpayments. Catching such errors means validation is an essential part of the payroll process. Within a single platform, data at the point of receipt is perpetually validated, helping catch payment errors before they cause problems further down the line. These validation checks happen at multiple points throughout the payroll process and are verified by tax experts, helping ensure the integrity of data and accuracy of your payroll.
Data security and compliance
Full integration with other systems removes the GDPR compliance risk associated with the manual data transfer. Not only does this remove the likelihood of fines associated with such non-compliance, but it also gives companies confidence that their own reputation and earnings will not be affected by the scandals that we all too often see centered on company data breaches.
Bottom line success
McKinsey & Co found that organizations that use HR and payroll data to allocate staff are 1.4 times more likely to outperform competitors who don’t. The same report found that, on average, these organizations create a 10% return to shareholders, versus a 6% for those who don’t. Over 20 years, that company will be worth twice as much as its less agile counterpart!
How a single system empowers CFOs
The benefits and advantages speak for themselves. In short, utilizing a global payroll system that offers a centralized location for payroll data allows CFO’s to leverage global payroll data in a more impactful manner. The data behind payroll can be so powerful in shaping a business’s future, providing information that supports business leaders in crafting effective strategies.
It uncovers those hidden costs that are no doubt accumulating year on year, allows businesses to better understand the costs associated with payroll, and supports effective decision-making based on concrete information.
The time is ripe to move to global payroll consolidation
In the past, it was unimaginable that a single payroll platform could facilitate the enormous and complicated task that is global payroll consolidation and centralization. In 2020, CFO’s should no longer be happy to accept sub-standard and inaccurate global payroll reporting or the excuses of those that don’t see what’s possible with today’s technology. We have the technology to make huge changes in the way global payroll in its own right is contributing to company goals, but also in the manner in which payroll data is accessed and utilized by companies worldwide for greater organizational success.
Immedis supporting business success
Immedis is driving such change and betterment through the Immedis Platform – a purpose-built, global payroll platform that supports the complete end-to-end payroll cycle and provides advanced reporting and real-time data analytics. ISO certified, Immedis gives CFO’s real-time global oversight and access to the data and information that is driving business growth. If you’d like to learn more about Immedis and how we can support your success through payroll transformation, get in touch today.
This post was written by Adrian Morrissey, Senior Commercial Manager of Immedis on the Immedis website here. They are an exhibitor on the HRTech247 Payroll, Time & Attendance floor. You can visit their HRTech247 exhibition stand here.