3 Tips To Get Your Payroll Project Signed Off By Finance
Employees are a business’ greatest asset – but generally also its greatest cost! Payroll is therefore responsible for successfully managing the area of primary business cost. So why can it be so difficult to get the Finance Director’s interest to invest in Payroll?
Business investment is generally driven by the need to improve effectiveness and efficiency in how products and services are delivered to customers. Ensuring the right numbers of employees are doing the right things at the right times, in the right places, is critical. Sadly, ensuring that employees are rewarded correctly and in line with legislative requirements is seen as a back office overhead rather than critical part of this overall effectiveness picture.
The perception is of a small, expert but relatively low cost, payroll function (often hidden in the wider HR or Finance teams) that only becomes a conversation when a senior exec questions his pay or bonus! The complexity of getting payroll right, within complex business set ups, with many stakeholders, and often spreadsheet-driven cultures is not understood.
So when it comes to persuading the business that investment is required, what is the best approach?
In my experience there are three key things you need to cover:
1. The size of the prize
Does your business really understand the total cost of payroll delivery? This is not just the cost of the in-house payroll team or external service provider. Consider all the data inputs and outputs. Who do these come from and go to? What people costs are there around the business for generating this data? What systems are critical to success? It’s not just the payroll system – think HR, Finance, Time and Attendance, Benefits… and what costs are incurred for these?
2. How you’re minimising financial risk
The potential cost of non-compliance to the variety of rules and regulations around payroll range from small to punitive. But is that the only risk? When an employee believes they are underpaid, they shout. How often do they admit to overpayments? What is your risk around this? The causes of underpayments are often the same risks for overpayments.
3. Supporting future business objectives
Can you describe the complexity of your current payroll processes? What actually happens each pay period to ensure accuracy of pay? The complexity is often driven by terms and conditions and, as businesses seek to deliver flexibility for customers and employees, pay terms are becoming increasingly more complex. Acquisitive businesses bring in different terms to add to the complexity. In addition the legislative and compliance landscape is becoming more complex and changing at a faster rate than ever. Now overlay your business landscape from a payroll perspective – where people work, how and where people’s data is recorded and processed – payroll has to manage the latter to comply with the former. Payroll needs to be set up to support these future internal and external change complexities, without the current payroll process becoming even more complex.
A Finance Director will want to understand why he should put your payroll investment ahead of other pressing business needs. Effectively describing:
– The size of the prize
– How to minimise financial risks, and;
– Efficiently support business growth and future legislative change
will put you in a good position to make your case!