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The modern CFO is not only charged with finding creative ways to reduce costs and optimize spendings, but is also expected to act as a strategic advisor across different business functions. In order to fulfill their versatile role, CFOs need a holistic view of their organization’s payroll operations and access to reliable data and insights.
If managed properly, global payroll can provide CFOs with all the data and insights they need. However, the strategic potential of payroll often remains unexplored. In this blog post, we will explain:
What value global payroll holds for CFOs,
What challenges they face in leveraging global payroll to their advantage, and
How CFOs can unlock the strategic potential of global payroll.
The role of the CFO in an organization has changed over the past couple of decades. Instead of being only responsible for crunching numbers, ensuring the business is doing well financially, and providing financial reports to the CEO and other departments, the CFO is nowadays increasingly required to provide strategic guidance across departments.
The new expectations towards the role mean that CFOs need a holistic view of what is going on across the whole organization, including across different departments and geographies. As one of the biggest cost centers for organizations, payroll is a key source of information for CFOs when it comes to gaining the necessary insights to make informed business decisions.
CFOs need detailed insights into payroll data and processes, compliance issues, and potential tax challenges to identify growth potentials, implement strategic workforce planning, and prevent business disruptions. This is where payroll comes into play. Payroll can deliver all the necessary data and insights CFOs need in order to act as strategic advisors for their organizations.
There is an ongoing discussion about whether payroll should report to HR or finance. As a result, the responsibility for payroll is often divided between the two departments, which means that it’s often not a priority for improvement initiatives and transformation projects. And even if they do try to leverage the potential of their global payroll for strategic purposes, multinational CFOs often encounter several hurdles. These hurdles include:
Lack of consolidated global insights into costs and payroll data,
Different currencies which make it hard to compare costs and expenses for different geographies,
Limited access to payroll data from different payroll countries,
Reporting inconsistencies across geographies,
Individual payroll components for different countries,
Changing in-country legislation,
Lack of real-time reporting,
Inconsistent data formats, and
No clean, structured global payroll data.
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A global payroll solution can help CFOs achieve significant improvements with regard to financial planning, operational execution, and strategic decision-making. Here are five different ways CFOs can leverage the strategic potential of their global payroll.
In order to meet the expectations that are held towards them by other departments and stakeholders, CFOs need to gain full visibility across all payroll geographies. Monitoring and managing global cash flows effectively requires real-time access to payroll data and comprehensive reporting.
Global payroll solutions are not only able to provide a consolidated view of multi-country payroll data and global payroll costs, but also offer options for CFOs to analyze data sets from different geographies to drill down into pay elements, payroll taxes, overtime metrics, and more.
Additionally, consolidated global payroll data provides businesses with the information they need for future planning. For instance, if there are changes in payroll costs throughout the year, the data can be used by the business to better budget and prepare for future fluctuations.
Multi-country payroll solutions offer different possibilities for payroll integration, notably with the business’s finance system(s). Connecting payroll and finance applications allows for seamless bidirectional data flows between the two systems.
This not only saves time that would otherwise be spent on updating and managing duplicate data, but it also avoids data discrepancies and hence improves the data quality in financial reporting. The more accurate and up to date the data, the better the insights and input for informing business decisions.
Data-driven decision-making has nowadays become imperative for businesses. But in order to leverage payroll data to inform business decisions, CFOs first need to be able to interpret the data sets that are generated with each payroll run. This is where payroll analytics comes into play.
Payroll analytics transforms raw sets of payroll data into detailed insights that show businesses how high their total payroll costs are, what their total cost of payroll processing is, and how payroll costs are distributed across different pay elements, geographies, and more.
Also, CFOs can use payroll analytics to support hiring decisions. For instance, they can analyze in which geographies staff is needed most urgently, where staff shortages might occur in the future, and which departments are currently overstaffed to reduce employment costs.
CFOs are nowadays increasingly involved in risk and compliance management, and that across different departments and business functions. Not only are they expected to provide financial guidance, but they are increasingly required to advise on compliance risks linked to taxation, compensation, finance and accounting transactions, and government regulations affecting payroll.
A global payroll solution can support CFOs in managing global payroll compliance. In-built compliance features can highlight payroll anomalies and help prevent payroll errors, while ICPs can provide detailed compliance advice regarding specific local regulations.
One common global payroll pain point for many CFOs is that the quality of their global reporting is reduced by the use of different currencies for different geographies. If data on payroll taxes, salary payments, bonuses, and more is presented in different currencies, it’s difficult for CFOs to draw comparisons between different geographies and get a holistic view of the business’s global cash flow. Global payroll solutions often offer global payroll reporting provided in a single currency to allow for easy comparisons between geographies.
Global payroll is a vital strategic asset and an important enabler for CFOs that helps them fulfill the multiple roles they hold within multinational organizations. However, in order to unlock the full strategic potential of their payroll, CFOs need a unified global payroll solution that delivers detailed global reporting and real-time insights into global workforce costs.
Lano offers you a consolidated global payroll platform that allows you to manage all your payrolls under one roof. Get access to consolidated global payroll reporting for all your geographies and slice and dice your payroll data to get analytical insights from different angles. Easily find and fix potential errors in your payroll runs thanks to automated payroll-anomalies detection and connect our platform with your finance software to automate data flows between the different systems. Book a demo with one of our payroll experts to learn more.
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