Who Is Responsible for Payroll in a Company

On the other side of the spectrum, many people believe that payroll is a numbers-driven game, and who better to manage numbers than your trusted finance team? It`s important for hr and finance teams to work together to ensure payroll runs smoothly and legal standards are met. Unfortunately, many companies still struggle to decide which department is responsible for which aspects of employee accounting processing. In this article, we will give you an overview of the responsibilities of both teams so that you can organize your payroll efficiently and accurately. We will also discuss the benefits of a payroll service dedicated to large organizations. For many HR professionals, payroll processing is one of the many outcomes required for their roles. The argument that payroll departments should stay in the HR department is very often exactly the same reason why recruitment, training and development, compensation and benefits, etc. (you get the drift…) are the tasks of HR. If your employees have a lot of questions about their salary that need to be discussed confidentially on a regular basis, this makes the case for storing payroll information in HR. In everyday life, HR professionals are responsible for a significant number of important outcomes, ranging from recruitment to performance management and, most importantly, for the majority of payroll items processed – changes in payroll, salary, bonuses, employee hours and performance deductions.

Given that the majority of payroll data comes from HR activities, does this warrant an element of control? Of course, you can also turn this the other way around. While the finance department may have all the technical knowledge, it doesn`t care about employee issues and privacy, which could be a sticking point in case an employee has a pay issue. In Deloitte`s recent Payroll Operations Survey, they targeted experienced professionals in a variety of industries who lead or are directly involved in payroll operations. Companies with 1,000 to 50,000 employees tend to let their payroll services be handled by finance, followed closely by HR. One of the biggest challenges companies face when it comes to payroll is deciding which department should be responsible for it. This is one of the first things you need to consider when determining how you want to manage payroll in your business. If you don`t have the right people to take care of payroll and all related matters, it won`t be managed effectively. Human Resources is also responsible for motivating employees and rewarding employees for this purpose by developing compensation programs that may include vacation or semi-annual bonuses and salary increases. HR also develops training programs and ensures that employees follow a general direction by reminding them of the organization`s objectives. Segregation of duties is key to mitigating these risks to your company`s most important expenses.

You want the accounting staff to do the accounting, the finance people to take care of the finances and the human resources departments to take care of the human resources. I think this argues that the payroll processing function should be in finance, but most of its input data must come from human resources. When both of these systems work hand in hand, you can ensure that your most important resources and expenses are spent wisely. Of course, payroll covers both HR and finance, but since payroll is an employee-focused feature, it`s no wonder many think it should be under the sway of HR. So, does it make sense for payroll to be part of HR? Payroll is about paying people, and since dealing with people is the domain of the human resources department, this department may be better able to deal with the issues and problems that arise from payroll. Many payroll issues are usually associated with one aspect of human resources, such as hiring . B, dismissal, salary increases, benefit deductions and bonuses. Since the information processed by Payroll is confidential in nature, this also corresponds to the positioning of payroll within the HR department. In addition, some may argue that HR departments have a better understanding of payroll time sensitivity due to the issues they face when payroll is not processed on time. However, financial professionals would undoubtedly find gaps in this argument! Another possibility is for companies to look for a payroll outsourcing company. In the same Deloitte report, 31% of Asia Pacific companies outsource their payroll, and almost all companies outsource some of their payroll to reduce costs, manage risks, risks, risks, and skilled staffing issues, and reduce highly administrative/paper tasks.

A recent Deloitte report on payroll operations shows that companies with fewer than 10,000 employees tend to report their payroll services to HR or finance. The survey looked at 58 companies from various industries with employees ranging from 200 to 300,000 employees globally. Payroll, of course, includes both human resources (HR) and finance, and therefore seems to be the precious orphan of most organizations – much appreciated but without a clear home. A recent survey conducted by Advanced Business Solutions shows that opinions are divided on where payroll should be within an organization, with some HR and payroll professionals believing that they should be located in the HR function, others believing that it should be within the finance department, and others believing that it should be between the two departments or be outsourced to each other. .