The ‘single source of truth’ is a common expression used by global payroll professionals around the world and in this article, we will look to define what is meant by this expression and what global payroll professionals can do to arrive at this very necessary truth.
What is it?
The ‘single source of truth’ is a system or software that fully captures all the crucial and related global payroll data sources so that a complete, fully accurate and real time picture of multi country global payroll can be extracted from it.
Why does it matter?
Global payroll managers and leadership executives at multinational organizations need to know exactly where they stand when it comes to global payroll costs and processes. They need a single source of truth that cuts through the complexity and delivers them a figure or series of figures that accurately defines global payroll activity in their organization.
Why is it difficult to achieve?
Global payroll management has become very complex for a variety of reasons:
- A multivendor landscape crowded with different payroll providers spread across different countries and regions
- Non-standard data sources flowing into disparate systems from various external parties
- A lack of centralized data management of global payroll at multinational companies around the world
- Inadequate, dated or legacy technology stacks incapable of collecting the necessary data to provide this single source of truth
- Limited or sub-standard global consolidated reporting
- Rapid scaling activity at multinationals- they're growing too fast, on-boarding employees and local payroll vendors quickly with limited controls and procedures for effective data analysis
Who needs to see it?
A lot of people and the number is increasing. First and foremost, global payroll managers need visibility and control over their global payroll, so it is essential that they have a system or platform that delivers the single source of truth to them.
C-suite executives such as the CIO and the CFO and other business leaders are increasingly more interested in global payroll data- payroll is simply one of the largest costs at any organization in the world and a better understanding of how payroll is done and why is something that will be of interest to business leaders in any organization. Without the single source of truth, it is very difficult to accurately explain to them what is happening with global payroll and how much it is costing across their countries. Business decisions and business strategy for the entire organization may depend on big data and the system of record for global payroll metrics has a major role to play.
Human resources departments also need this single source of truth in order to ensure that HR system employee data matches the workflow data in the global payroll system to ensure effective and accurate payroll processing.
The single source of truth helps inform wider business and reporting metrics across the organization. Some departments may not need to interact with the exact single source of truth figures but they will always need it to be accurate and 100% reliable - for example, a financial accounting team delivering general ledger updates post payroll will have a legal and compliance obligation to ensure that these updates are accurate.
What is the challenge?
Many global employers choose to outsource the payroll function to external outsource providers or aggregators. There may be solid business reasons for choosing these models, but they also involve surrendering control over global payroll data, processes an activity to external providers.
The challenge then is how to arrive at this crucial single source of truth when your global payroll is not fully in your control and the disparate systems and process is in place make it hard to see what is happening.
The absence of centralized global payroll management and the subsequent lack of visibility and control associated with it, presents problems when attempting to get a clear view of a single source of truth.
Some questions that make up this single source of truth include:
What is the total cost of global payroll in my organization right now?
What is global payroll costing us in one particular country?
How did the cost in this country compare to another country on our payroll books?
How many joiners and leavers has there been in this organization in the last six months?
How can I prove compliance in a particular country or region?
What is currently the most expensive employee benefit or pay element?
Answers to these questions may be unavailable or take time to deliver. Employers may have to rely on outsourcers or aggregators to answer these questions, or the technology stack they have deployed was not designed to provide the necessary data source extractions or high-level reporting needed to answer these questions.
So, the overall challenge is around which global payroll model or technology stack is best suited to helping an organization consistently arrive at a single source of truth for their global payroll processing and cost activity.
How does a global employer maintain visibility and control when they have outsourced their global payroll to a third party? How do they arrive at a single source of truth if their operational model requires them to use multiple different payroll provider vendors across different countries? How can they take back control and achieve the visibility they need to arrive at this single source of truth?
How to get this single source of truth?
Work with a technology partner to install a fully integrated payroll technology platform -this is the best way to combine data flows from disparate systems so that they flow into a single manageable platform consolidating all the data in a standardized format. This will enable you to view the single version of the truth and cross reference global payrolls data with corresponding financial, HCM and human resources data.
The Payslip platform Is designed to facilitate the level of integration needed to achieve data quality and the single source of truth. Payslip is the only platform made specifically for global payroll management that is designed by workflow and facilitates data standardization by design. It connects seamlessly with popular HCM systems like Workday and multiple other systems and software tools in an organization’s ecosystem. Local country payroll vendors can also connect easily to this platform where gross to net payroll calculations and financial data can be ingested as part of the global payroll delivery process.
Payslip automates the workflow end to end, captures, automates, and protects the data in its original and changing form, delivering single view tracking of data transformation from inputs to outputs. Using this platform, global payroll managers can see and control what is happening with each of their monthly country payrolls. This is single system control and visibility over payroll at all stages of the process which connects all the key players such as vendors, systems, processes, local SMEs and HCM for comprehensive and detailed operational oversight.
The rich consolidated payroll data base enables global employers to access , view and analyze all of the data contributing to their multi country global payroll so that they can get to the single source of truth in a smart, fast and efficient way.
Prioritize it
Employers need to be in a position to determine how much they pay employees, what countries they have payroll in, and how much their payroll service provider is charging. Answers to these basic questions are required for crucial decision making and in a fast-moving data driven environment, it is no longer acceptable to have accuracy issues or lengthy delays in accessing this essential global payroll information.
If payroll amounts to between 60-70% of an organization’s total operating costs, then information that confirms these costs should be prioritized at the highest level. This may mean greenlighting a digital transformation project to ensure that the global payroll department is equipped with the right technology stack and global payroll model to ensure that the single source of truth is always readily available and accurate.
At Payslip, we fully understand the importance of being able to access the single source of truth and we have designed technology to return control of global payroll to the global employer. Our integrated platform together with our global payroll standardization playbook can quickly lay the foundations for the level of integrated data flows needed to display the single source of truth in real time. Talk to our team today to get started with your global payroll digital transformation.