In a post Covid world, business data and forecasting information has now become more crucial than ever for accurate decision making. Companies and business leaders need to get a handle on costs- this means that having visibility over their largest cost is significant and their largest cost is nearly always going to be their global payroll.
The office of the CFO and the finance function is the one that is responsible for all financial reporting and being able to understand various key data and metrics. Chief financial officers are the people who are required to handle the company’s budget investment and they are often expected to introduce some risk management and cost saving initiatives. They need key payroll data and reporting in order to get a strong understanding of exactly how much is being spent on payroll and where.
This article will be looking at how payroll data and reporting can be made more efficient with the right technology and how important detailed reporting is when it comes to actionable insights and an overall bigger picture view.
CFOs need access to data
A key challenge for CFOs will be their ability to access this payroll data. A lot of companies are still processing their payroll manually via spreadsheets and emails, meaning that innovative digital reporting technology is still not a part of their payroll process. This results in companies not having a clear way to deliver the information that financial operation executives and the CFO need, which ultimately has an impact on business performance.
This is an issue when it comes to the tasks and responsibilities of financial executives, by not being able to get a clear overview of what is really going on in the payroll process and being unable to get full clarity on the overall labor costs for the company can make it difficult to then plan out what needs to be done in terms of the company’s budget and business strategy.
So, this is certainly a challenge when it comes to visibility access for CFOs, it is more difficult to understand any payroll costs if there is no reporting in place that can deliver it- how will they be able to get access to the data needed and translate it into digestible and easily understood reporting?
The answer to this lies in an overhaul of the global payroll delivery and management process. A new payroll model, system and process needs to be in place which includes innovative digital tools for globally consolidated reporting that is delivered quickly and easily. By implementing more advanced and innovative technology, this is achievable and will result in chief financial officers having clear access to their company’s payroll data, which will ultimately make the management of their payroll costs much easier to understand and control.
Look at tech solutions
When it comes to data reporting and insights, the solution lies in technology, such as tech stacks or digital platforms that are built to integrate with financial software packages and HR systems. When related departments are connected, then it means that the necessary data is flowing seamlessly to all of the key related systems involved, especially if they leverage automation and artificial intelligence for their business intelligence and analytics capabilities.
This can facilitate the easy extraction of the data needed for multi-country reporting. Reporting is now much more detailed and comprehensive and is the sort of reporting that can deliver global insights & advanced analytics but can also allow a CFO to drill down into specific pay elements- this can help the CFO, as well as other finance leaders, to find out the true cost of labor within their company. Integrated technology solutions that are built to connect HR, finance and payroll departments together are the answer here.
A lot of finance teams want to make sure that their company is prepared to react appropriately to any pricing and bottom line profitability issues and also want to pinpoint which areas of their business require a deduction or management in costs. Trying to determine such parts of the company can be made a lot clearer and more obvious if there is sufficient real-time data reporting available for operational data analysis. Being able to maintain strong visibility and data insight in order to help any current planning or goal targets could prove very beneficial when it comes to the responsibilities of a chief financial officer. This is something that can only be acquired through efficient and integrated technology systems which connect and optimize data sources.
Due to the pandemic, the inability of manual processes and legacy systems to sufficiently perform to the level that was being required by financial departments was exposed. This led to the realisation that more digitally advanced and innovative technology platforms were required if companies wanted to reach their goals and manage their strategic decisions in a productive way. When it comes to CFOs, they need to consider a digital transformation in order to acquire the data, predictive analytics and business insights that they need to see what exactly is happening on a cost level.
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It is all about the bigger picture for CFOs
Global payroll data has a lot to say when it is released via smart technology and digital reporting tools- the problem is that it is currently trapped in legacy technology, multiple systems, and processes and as a result, it is challenging work to try and extract the necessary data analytics.
This means that there are no bigger picture insights, and a CFO ends up essentially flying blind and being forced to make important strategic and investment related decisions without the bigger picture data support and analysis that they need. The bigger picture is all about understanding the whole story and that is why more innovative digital technology systems that support reporting and performance management kpis are needed.
The bigger picture is the macro view on a global level but there is also a need to see the micro view- being able to drill down into pay elements such as salary and bonuses so as to find out which specific countries might be more advantageous to hire new employees from a cost perspective. Furthermore, good quality reporting ensures that CFOs can compare labor costs across multiple countries, often in a single currency- this is all bigger picture insight and analysis in action. Without such insights, there may be a bit of guesswork involved instead and no CFO wants to be in that position.
The bigger picture view influences the company direction and strategy, so it needs to be supported by solid and proven financial data. Additionally, this data needs to be available to the office of the CFO in a digestible and easily understood format so that the CFO can use the reporting and analysis to inform other c-suite executive members.
When this reporting exists, the CFO is in a position to make informed decisions - this new level of insight and comprehensive reporting can lead to the kind of clarity and accurate decision making that is needed to gain a competitive advantage in the marketplace.
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