Payroll data - from more to better

The trend in Danish companies is to go from more to better. But what does it mean, and how can this trend have a positive impact on the results of your payroll department? We'll examine that in this article. You'll also get a specific recommendation for the next step to take as a Payroll Manager if you want to optimise your payroll reporting process and spend time on more value-creating tasks.

When we hosted a reception in connection with the publication of the book 'Din guide til lønprocessen' ('Your guide to the payroll process' - only available in Danish), we had invited Futurologist Anne Skare Nielsen for a talk about the trends that she predicted would be of importance in the payroll area in the future. And, according to her, a major trend was the transition from more to better.

This subject created resonance; not only with the audience, but also with us from Basico, because going from more to better is often requested by our customers - not only within Payroll Services.

That's why we'll delve into an area where the 'from more to better' approach presents great potential for improving payroll work - viz. payroll data and how to use them in the reconciliation and reporting phases.

Many companies use their payroll data ineffectively. Primarily because they don't have a sharply defined purpose of their reconciliation process, resulting in a lack of overview of the data needed to support that purpose. Instead, payroll data are often a hotchpotch of data that have either been included just to be safe or according to the motto: "That's how we usually do it."

That's why many companies' payroll departments use large, complex data sets that cannot solve the payroll reporting task in an efficient way.

In reality, companies often use large, complex Excel sheets filled with payroll data only to find out - after having reviewed their actual needs - that they could do with a mere 30-40 per cent of what they used to.

But why is it a problem to include much data? To answer that question, we need to ask whether it's a problem at all. Isn't much data just a sign that the payroll department has much knowledge and a good overview?

Unfortunately, the answer is: Not necessarily.

In brief, the solution begins with you being attentive of the recipients of the reconciliation and reporting data and their needs.

More specifically, we recommend that you start by mapping the relevant stakeholders in this process. They will probably cover a wide field of users - during the first part of the process, they will typically be your payroll employees, and during the latter part of the process, they will be finance employees, auditors, or others in your company who need your data.

Invite the employees concerned to a meeting or a workshop, where you can establish an overview of what to reconcile and document, which data are needed for this, and how to transform this into a specific process to be implemented in your everyday work. While you're at it, you can also define a clear purpose of the reconciliation and reporting process.

Spending a day considering your needs in more detail and structuring your data and your processes properly will give you a better result in the future and require less time for the task.

In addition, it's a simple solution where the time spent is quickly earned - and at the mere cost of the coffee consumed during the meeting.

You should also remember to arrange a follow-up meeting some months later for evaluation of the new work processes and identification of any new needs that may have arisen. Sometimes, a scrutiny of data will also identify a need to have a closer look at your payroll system.

It is very likely that your meeting on data needs will also result in a need for changes to your payroll system - for example, as regards data extracts or system configuration. Since the right system support is also important to your possibility of optimising the company's use of payroll data.

You may even find out that you need a completely new payroll system. If this is the case, developments in payroll systems are an advantage to you. As it is, most companies have gone from having very complex system landscapes across the HR and payroll areas to having more efficient and standardised systems that are better correlated and support each other. And this has also resulted in improved data quality, thereby creating more confidence in the company's payroll data.

The greater confidence in the data allows you to make better, more focused reporting containing fewer, but more relevant data.

1. Has this whetted your appetite for moving the payroll department's reporting and reconciliation processes from more to better? If so, we hope that this article has provided insight about the challenge and has prepared you for taking the first big step on the way towards more relevant reporting with fewer (and more customised) data.

In summary, our recommendation for a specific plan right now would be:

1. Reserve some hours in your calendar and invite the task stakeholders on both sides of the reporting process to a meeting or a workshop.
2. Map your respective needs, the data in support of these needs, and how to implement your findings in your work processes in the future.
3. Check whether your payroll system needs to be changes to support the new data.
4. Arrange a follow-up meeting in a few months, if relevant, to assess the impact on your work and to identify any new needs (as regards data and/or systems or something else).

We wish you success with your work.