Accurate payroll reporting is a crucial factor to having a global view of your business, especially in terms of spend. Payroll is one of the largest expenditures for any enterprise, and when you lack a truly global perspective, you risk having full visibility into your business.
A comprehensive and unified global payroll system has a standardized process for delivery of data to one, centralized system through a uniform formatting approach. In the absence of such a system, each country potentially collects their data in a different format for the central office, and a payroll administrator must take the time to try to aggregate all this data into one, accurate report for the business. This decentralized method of payroll management fails your business on several fronts, especially as it concerns ensuring accurate reporting and analytics needed to make strategic business decisions.
For companies without a clear understanding of their payroll, their ability to analyze and utilize the data is limited. This causes several issues to arise.
Without a standardized process for reporting, one of the most immediately pressing and serious issues a business can face is having inaccurate payrolls. Environments without formalized procedures are also often “high touch” environments, or those where many people manually interact with data and other information. Combine this with poor communication and you’ve created a situation with a large amount of risk.
Manual processes will always increase the likelihood of an error occurring due to human involvement and when that happens, many people must further “touch” the data to make sure it has been successfully filtered out. This results in confusion and the opportunity for mistakes to impact payroll at a basic process level, potentially scaling to cause payroll-wide issues. The most serious consequence of inaccurate payrolls is, of course, employees not being paid correctly or on time.
Even if it is not a far-reaching or serious issue, errors still take time to rectify; time that payroll administrators should be spending preparing the next payroll. Falling behind on payroll can become a serious issue that ultimately results in more errors as employees rush through the process. If employees are under or overpaid, that will also cause a lot of complications during an audit or confusion as they have to return the extra pay.
Inability to Meet Legislative Requirements
Inefficient global payroll reporting also has ramifications outside of your organization. Depending on the countries in which you operate, your business must meet certain legislative or legal requirements, and failing to maintain these records can lead to a host of legislative issues such as penalties, fines or lawsuits.
With so many other needs demanding their immediate attention, best practice payroll record-keeping may fall to the back-burner, especially with its complex administrative requirements. However, if it’s been on the back-burner, it’s suddenly urgent when it’s time to file taxes or during an audit. Each industry has local government-mandated statutory reporting as well as other country-specific laws and regulations, such as gender pay gap reporting in the UK or reporting on labor unions in the US. Not only must you be aware of the legislative requirements your business must adhere to, but your business needs to maintain accurate, up-to-date records of payroll data. A localized payroll reporting process makes this especially difficult to achieve since all the information doesn’t originate in the same place.
Excessive Administrative Loads
Along with the issues caused by manual intervention, the time and resources that must be dedicated to collecting and aggregating multiple datasets causes excessive time constraints and administrative overload for payroll employees.
A decentralized, global reporting system requires a much larger and more localized management infrastructure. Having a team of payroll administrators for each country or region around the world is not practical for a global business and makes for a very cumbersome system for payroll management. The reasons for requiring such a large workforce to maintain payroll are apparent; it takes a lot of people to keep an inefficient system functioning. Payroll employees must ensure all past mistakes are being fixed to keep payrolls going out on time on top of their core responsibilities, and adding to an existing workload.
Data from each country or region must be manually input to develop a global report and analysis, a process that is very time-consuming and not consolidated. This is an avoidable step that wastes resources and manpower. A unified and centralized global payroll system eliminates this process and the errors that are likely to result from it.
Uninformed Decision Making
The role that data can play in well-informed decision making for your business is well known. Data-driven decisions are simply more reliable than uninformed guesswork. More data does not guarantee better decisions, though, especially when the accuracy of that data is called into question.
By being unable to provide current and/or accurate payroll data, the decisions you make regarding the strategic direction of your business moving forward will suffer. Having real-time, comprehensive payroll reporting and the ability to perform analyses gives you a more complete view of the problem you’re trying to solve. For instance, if you’re trying to determine if you have the capacity to expand your business to another region, understanding your payroll expenses is vital. Relying on outdated or haphazardly compiled payroll data won’t paint you an accurate picture of the state of your finances.
Take Back Control with a Global Payroll Reporting System
Implementing a payroll reporting system on a global scale gives you full visibility of your company and its many employees. With the accuracy and functionality this kind of system provides, you can finally take back control of your payroll process and make better business decisions.
A global payroll system can assist you in the reporting process, providing highly configurable reporting and analytics. You’ll have the ability to quickly create reports in any currency, for any time period and for any payroll without wasting resources manually collecting and configuring data. This kind of instantaneous access to data will improve the quality of your decisions and point your business in the right direction.
a few simple ways a global reporting system can make a difference for your
Improved Accuracy for Smart Decision Making: Manual input is prone to mistakes – a keying error, a distraction, transposed numbers – and if your reporting is relying on that manual data, one error can throw off the accuracy of the entire report – and the decisions that are make because of it. By reducing the risk of human error, your data will be more reliable, saving you and your company time and money.
Resource Allocation: With a global reporting system pulling in data from all of your countries in real time, it allows you to allocate the appropriate resources where and when they are needed. It also provides insight into you payroll spending and employee utilization, allowing you to plan ahead for where you need additional support or where to grow your business.
Employee Satisfaction: There’s not many other areas that can impact your employee satisfaction besides payroll. Employees want stability and security when it comes to their pay. When you have accurate reporting, you can ensure that your employees are being paid the right amounts, at the right times, on-time. With a global payroll system, you can also find any errors that do happen much quicker and correct easier than if you are working manually. When employees aren’t worried about their pay, and your payroll staff is concentrated on analytics rather than manual input, you can expect higher employee satisfaction across the board. If you have any questions about global payroll reporting or want to learn more about how an integrated payroll system can help your business moving forward, reach out to iiPay today.