How a multifunctional shared services environment benefits payroll How a multifunctional shared services environment benefits payroll

How a multifunctional shared services environment benefits payroll
28 Feb 2016

How a multifunctional shared services environment benefits payroll

Why it’s important?

The success of the payroll process is highly dependent on activities that occur upstream in the hire to retire process. With this in mind, companies are realising benefits and ultimately experiencing more success when the focus is on the end-to-end process versus a siloed focus. For this reason, we are seeing more success in both payroll and HR operations when the two processes are combined, enabling an end-to-end process focus.

Strategic implications

The ability to focus on the end-to-end process better positions companies for service delivery success. We see many global shared services organisations focus on the procure-to-pay process instead of just accounts payable, customer-to-cash instead of just accounts receivable, account-to report instead of just general accounting and hire to retire instead of just payroll.

In fact, more than 70 per cent of top performing payroll organisations successfully deliver services in an environment that focuses on the end-to-end process. Meaning payroll systems, policies, processes and procedures are designed with the end in mind, considering all inputs and outputs. This allows optimisation of the relationship between HR and payroll and payroll and finance, ensuring all parties understand the importance of their role in creating a successful employee experience.

In recent years, we have seen many companies that do not have a multifunctional shared services environment in finance move the payroll process to human resources in order to focus on the success of the end-to-end process. This is also true for companies that have traditionally aligned payroll under finance and managed it in a corporate environment, where the recent trend is to move the alignment of payroll to human resources, again in order to capitalise on system, process and compliance synergies.

For most companies, the financial oversight required by finance leaders is not lost as a large percentage of them will manage payroll accounting in finance or an accounting centre of excellence. 

• If your company manages the payroll process in a shared services environment, is the focus on the end-to-end process, or is it operating in silo?

• Are there plans to move the focus from a silo to an end-to-end process focus?

Although payroll leaders won’t drive the type of shared services environment a company chooses to operate in, they should be able to speak to the pros and cons of both environments. What would you recommend for your company?

Contributed by Felicia
Cheek, Global payroll
advisory programme
practice leader and
senior business advisor
at The Hackett Group

How a multifunctional shared services environment benefits payroll

Why it’s important?

The success of the payroll process is highly dependent on activities that occur upstream in the hire to retire process. With this in mind, companies are realising benefits and ultimately experiencing more success when the focus is on the end-to-end process versus a siloed focus. For this reason, we are seeing more success in both payroll and HR operations when the two processes are combined, enabling an end-to-end process focus.

Strategic implications

The ability to focus on the end-to-end process better positions companies for service delivery success. We see many global shared services organisations focus on the procure-to-pay process instead of just accounts payable, customer-to-cash instead of just accounts receivable, account-to report instead of just general accounting and hire to retire instead of just payroll.

In fact, more than 70 per cent of top performing payroll organisations successfully deliver services in an environment that focuses on the end-to-end process. Meaning payroll systems, policies, processes and procedures are designed with the end in mind, considering all inputs and outputs. This allows optimisation of the relationship between HR and payroll and payroll and finance, ensuring all parties understand the importance of their role in creating a successful employee experience.

In recent years, we have seen many companies that do not have a multifunctional shared services environment in finance move the payroll process to human resources in order to focus on the success of the end-to-end process. This is also true for companies that have traditionally aligned payroll under finance and managed it in a corporate environment, where the recent trend is to move the alignment of payroll to human resources, again in order to capitalise on system, process and compliance synergies.

For most companies, the financial oversight required by finance leaders is not lost as a large percentage of them will manage payroll accounting in finance or an accounting centre of excellence. 

• If your company manages the payroll process in a shared services environment, is the focus on the end-to-end process, or is it operating in silo?

• Are there plans to move the focus from a silo to an end-to-end process focus?

Although payroll leaders won’t drive the type of shared services environment a company chooses to operate in, they should be able to speak to the pros and cons of both environments. What would you recommend for your company?

Contributed by Felicia
Cheek, Global payroll
advisory programme
practice leader and
senior business advisor
at The Hackett Group