CFOs: Do you have the technology to collect and report on payroll data?

May 3, 2023 | 5 Mins David Daly

CFOs are required to have a lot of data at their disposal. Some key departments such as human resources and finance may be able to supply this person with data that is related to their specific department.

Increasingly, in a changed work environment where hybrid and remote working has become the norm, there is a need for CFOs to have a better understanding of global payroll costs across all of the countries an organization is based in.

But do CFOs have the right technology to collect and report on payroll data?

This is a key metric in any organization. CFOs need digital technology to extract payroll data which can reveal a lot about the financial health of an organization.

In this blog post, we’ll take a look at the tools they need in place for data and reporting, the macro view of payroll, and how to drill down into the payroll data. We’ll also explore how global payroll reporting and metrics are essential for informed decision-making in the office of the chief financial officer in 2023.

The tools in place for data and reporting

For a variety of reporting requirements, there are a number of software programs available that can help with the collection and reporting of key company data. These programs typically offer a variety of features, such as the ability to generate customized reports or export data to other software applications.

There are a few things CFOs and finance teams need to keep in mind when choosing the right technology for collecting and reporting on payroll data. First, it should be able to integrate with your existing accounting and financial systems. Second, it should be easy to use and generate reports that are easy to understand. Third, it should be able to handle large volumes of data and be scalable so that it can grow with your company.

There are a number of different digital tools available to CFOs that can help them collect and report on payroll data. One such option is global payroll control platform. This type of digital, cloud-based platform can provide CFOs with real-time access to global payroll information such as labor cost split by country, entity and region. These costs need to be comparative so that the CFO can understand how they differ across countries.

Without this type of digital platform, which is fully integrated with human resources systems and finance software applications, a CFO will struggle to extract and analyze the financial data needed to truly understand bottom line labor costs inside the organization. The reporting on global payroll needs to be detailed, consolidated across countries and comprehensive. It is also important that the reporting is in real time and can be accessed on a self-serve basis-all of this is achievable with a global payroll control platform.

The macro view of payroll

As the chief financial officer of a company, one of their most important responsibilities is to analyze and understand payroll data, which tends to be one of the company’s largest expenses. This data can provide invaluable insights into the financial health of the organization.

The macro view is a list of high-level labor costs that can be consolidated by region, for example, Eastern Europe or South America. This would give a CFO instant access to exactly how much money is being spent on employee salaries and wages in a specific region. A CFO needs to look at specific countries within this region and compare them. Ideally, they want to compare in a single currency. All of this requires a level of sophisticated reporting technology, which is essentially purpose built for payroll data and global payroll reporting.

The macro view can give a clear oversight so the CFO can get a quick handle on labor costs before they chooses to drill down into the deeper details around pay elements and specific payroll costs such as taxes, bonuses and pension contributions.

The challenge a CFO faces in many global organizations today is that the technology simply does not exist, as an investment has not been made in a global payroll control platform. Sometimes it is the case that the digital transformation has taken place, but it has stopped at the human resources department- this is a common oversight- digitizing the HR department but not continuing with the digital transformation and following up with the digitization of global payroll, something that is intrinsically linked to human resources and financial operations.

Drilling down into the payroll data

One a CFO is satisfied with the macro view and has the bigger picture insights, they will then likely be interested in drilling down into the micro details as these are often the details that can tell the full story behind the global payroll data.

Drilling down into the micro details can give information around which country is the most expensive in which to base employees, what specific pay elements are costing an organization the most, where taxes are higher and what specific contributions and deductions are impacting labor costs the most. This is crucial information that cannot be received in a basic or generic high-level report, generated by a third-party payroll provider using dated software to run reporting.

For this level of detailed and nuanced reporting, a purpose-built cloud-based payroll platform is required-one equipped with innovative digital reporting tools with multiple filtering options to drill down into the details of each individual country payroll. The hard data contained in these detailed reports can be far more revealing than the initial high-level overview. It is all about the detail, and when it comes to cost management initiatives, the details have to be accurate, and up-to-the-minute-CFOs are risk averse personalities by nature, and they don’t want to have to make any decisions without detailed and comprehensive data to support their rationale.

By tracking key micros metrics, CFOs can get a better understanding of their organization’s labor costs and make more informed decisions about where to allocate resources. The right technology can make it easier to collect and report on this data, giving CFOs the insights they need to make sound financial decisions.

Informed decision-making in 2023

Informed decision-making in 2023 will require CFOs to have access to technology that can collect and report on payroll data. This data is a key metric in any organization, and by tracking it, CFOs can get a better understanding of their organization’s labor costs. With this information at their disposal, CFOs and the finance department will be able to make more informed decisions about budgeting, forecasting and where to allocate or optimize resources.

Recent media reports indicate many global countries could face recession-based challenges in 2023-therefore, accurate and up-to-the-minute reporting that is detailed and comprehensive can really help with informed decision making when it comes to cost management initiatives. CFOs are likely to demand detailed global payroll reporting data at various points in 2023 so organizations need to take steps to make sure they are in a position to provide this essential reporting up the chain to the office of the CFO and the c-suite.

Things can change quickly with global economies and the business world, so it may not be very long before a CFO requires detailed payroll reporting for a different and more positive reason-that is returning to growth initiatives and looking at company expansion.  Again, global payroll data and reporting can point to financially advantageous locations in which to hire, while also helping with forecasting labor costs.

The need for detailed global payroll reporting is not going to go away, it is only going to increase in demand. Companies who have not chosen to invest in a global payroll control platform which can provide the level of reporting needed, may find themselves behind the curve in the crucial area of accurate reporting, hard data, key metrics and trending information. CFOs at large organizations around the world today will most likely find this to be an unacceptable situation as it limits their strategic planning abilities.

 

 

For more information about our Global Payroll Control Platform contact us today.

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