India/ Bengaluru

Building Better Businesses with HR Automation

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Managing payroll and HR in multiple locations and markets is an arduous and time- consuming activity that modern organizations struggle with. Not only does it increase the risk of inconsistency and non-compliance, it limits management from having a global, eagle-eyed view of the organisation. This white paper details the benefits of cloud-based HR and payroll systems that can build cost and manpower savings into the entire payroll process. Automated payroll solutions allow businesses to deploy a robust, single platform that is scalable and compliant across multiple regions.

In today’s competitive business environment, employers are continually looking for ways to save money, increase efficiency and improve productivity. However, many of the advances in technology that have automated business processes and optimized workflows have had minimal impact on the distribution challenges facing payroll managers at corporations across the world. Some of the most technologically adept businesses continue to struggle with legacy payroll distribution challenges that have a significant impact on their bottom line. From reducing the high costs associated with processing and distributing salaries, to complying with state and central regulations, to working to avert fraudulent activities like counterfeit payslips, organizations of all sizes are attempting to solve these challenges with solutions that don’t fully meet their needs.

For many years, the approach to payroll distribution has varied little -- meet compliance regulations and reduce payroll costs with an offer of voluntary direct deposit to employees with bank accounts. By implementing a revolutionary new payroll distribution solution that meets compliance requirements and disparate employee needs, companies are on the verge of reaching the once unimaginable goal of 100 percent electronic pay. Payroll automation systems eliminate the challenges of manual, paper check solutions. They offer electronic payroll distribution solutions, automated compliance parameters, and reduce inefficiencies engendered by paper-based, or manual systems. It allows enterprises to profit from the benefits of flexibility, by choosing a payment distribution solution that meets compliance requirements, employee needs, and the goals of the corporation.

Powerpay is AscentHR’s payroll engine based on decades of experience with payroll automation. This core payroll engine powers the payroll process for over 400 clients, in more than twenty countries.

Powerpay has the functional and regulatory robustness to automate payroll processes across diverse industries, geographies and organization structures. At AscentHR, we have built a flexible payroll platform for configuring any country’s payroll process rule with quick turnaround times.  PowerPay is packed with an array of highly scalable features that offer flexibility, compliance, and ease-of-use. PowerPay allows organizations to customize the following features:

  1. Organisation Configuration
  2. Componentization
  3. Over-Time
  4. Tax Configura
  5. Employee Master
  6. Integration with StoHRM
  7. Smart Report Configuration

Powerpay’s organizational configuration includes statutory controls, currency formats, date formats, decimal controls, working patterns, holiday calendars, batch processing controls and various other features that have the flexibility, functionality and fitment to automate payroll processes in multiple business environments.

The component module of Powerpay enables functionalities like statutory controls, grouping, display orders, calculation orders, taxation, one-time taxable control, fixed method, slab method, formula method inclusion, and so on.

Powerpay modules are so flexible that they can accommodate multiple steps of computation, with rounding value control and multiple options for overtime.

The tax configuration module will enable the configuration of country-specific tax rules. These include benefit management, exemption control, statutory exemption, perquisite automation, investment, tax computation on lumpsum payments, formula configuration that is either slab-wise, fixed, or percentage-based. PowerPay’s tax computation feature can either be projection-based or based on pre-set pay period income.

The employee-master module can capture employee-related data that is required for computation. This is configurable, and input details can be integrated with our the STOHRM application. Therefore, no manual intervention is required for input.

Power Pay has automated major payroll processing variables like Loss Of Pay, Leave Without Pay, CTC Change, CTC change for over time computation, hold salary, release salary, accrual process, tax computation, and so on.  Smart Reports are another winning PowerPay feature, that allows customers to configure reports on-the-go. The module has the capability to automate thousands of reports. Powerpay also enables you to access customized audit logs; enabling the traceability of all data and information. Data encryption is enabled at the database level. User authentication occurs through single sign-on.

Today, companies have an increased interest in leveraging shared resources and services throughout the enterprise for better efficiency and consistency in corporate processes. Presently, 57% of top-performing payroll organizations operate in a traditional shared services environment. They optimize resources, processes and systems to pay employees at lower cost and with fewer resources than other, more typical organizations. Additionally, the growing ease of accessing “big data” and business analytics is enabling greater insight from centralized, standardized data sets.

Payroll technology in its traditional form has proved to be inefficient and ineffective in companies with a global enterprise operating model. Much of the technology’s complexity is due to the need to meet legislative requirements at the local, national or international levels.

Multinational companies’ ERP systems are normally not flexible enough to provide a single, global, enterprise-wide solution for payroll without a great deal of customization. On the other hand, local solutions, designed to meet country-specific legislative and other requirements, do not provide a global solution. This lack of a truly global payroll processing solution has forced payroll leaders to work on designing a global payroll strategy that incorporates several different solutions at different points in the process.

These issues are the driving force behind payroll’s underperformance in three areas:

  • Enterprise-wide visibility: Organizations cannot get a comprehensive view of enterprise-wide payroll data.
  • Integration: Organizations suffer from data loss and excessive process complexity due to poor integration with other systems.
  • Automation: Manual intervention is error-prone, raises costs and lowers productivity.

The difficulty of establishing truly seamless payroll systems restricts enterprise-wide visibility across regions, obscuring potentially valuable insights on broad labour-market trends. In smaller companies with less-complex systems, HR leaders can analyze data such as compensation rates, benefits and paid time off (PTO) for the enterprise and compare across corporate offices in one report; with minimal issues. However, this approach does not work for pulling data when formats are inconsistent across regions or multiple currencies are involved.

Current payroll solutions are not capable of providing an enterprise view when operations extend across multiple countries. Only 39% of companies have enterprise-wide reporting capabilities, and an even smaller fraction of global companies have enterprise reporting capabilities. Payroll leaders need to work toward getting or maintaining this visibility as companies globalize and require more sophisticated analytical capabilities. Otherwise, the business will be unable to forecast and manage employee wage/salary budgets, analyze the impact of change across the enterprise, or proactively monitor and act on emerging workforce trends.

Additionally, current technology solutions lack adequate functionality to allow companies to view data in different currencies. Without it, manual intervention is required to meet enterprise-wide reporting requirements. Decision-making can be more difficult when companies must factor in currency exchange and labour market rates. In the absence of enterprise-wide reporting capabilities, many companies require common data standards across all payroll systems as a way to ensure data integrity.

Another area of concern is identifying an enterprise-wide system of record. Three-quarters of companies use their HR system as the system of record, while about half use the payroll system instead of (or in conjunction with) the HR system. Without a single system of record, preparing enterprise-wide reports and other analytics is much more difficult. Doing so is even more challenging when local legislative requirements dictate that data elements that would normally be included in the HR system also be stored in the payroll system. Payroll leaders should partner with HR organizations to make sure that fundamental best practices are not compromised when finding workarounds for these obstacles.

Integration System integration is not only a key enabler for the payroll process, it is necessary to guarantee adequate controls, data privacy and an appropriate set of checks and balances. Most organizations have been able to achieve a high level of integration within one country. However, when it comes to global payroll integration, the predominant approach is standalone systems with few integration points.

Analysis of integration rates across regions suggests that only a fraction of organizations have high levels of integration with other key systems. A lack of integration leads to data redundancy and integrity issues as well as additional effort and difficulty in reporting. As a result, payroll resources are required to devote substantial time to ensuring that data is being managed effectively across systems.

Top-performing domestic payroll organizations have traditionally had high levels of integration between the payroll system and other key systems like HRIS, benefits and accounting. However, until more-comprehensive solutions become available that will allow them to better leverage technology across the enterprise, they must settle for a homemade patchwork of internal fixes to achieve and sustain enterprise-wide payroll.

Local legislative requirements, cultural differences and a largely decentralized payroll environment have forced companies to step back and rethink their enterprise-wide payroll technology strategy. Even when a payroll supplier markets itself as “global,” it is probably using a combination of its own systems and those of other in-country solution providers. As a result, they become a consolidator of payroll data, pushing the data out to other systems like HRIS, time reporting and accounting.

If payroll leaders opt to use the services of these companies, they must develop proper checks and balances as well as implement new procedures to ensure that data will be accurately and securely transferred between systems. Additionally, companies can reduce complexity, redundant data entry and the risk of errors by standardizing end-to-end business processes. The lack of integration throughout the payroll administration process increases the risk of non-compliance as well as labour costs, so governance and standardization are critical while payroll technology moves to a more integrated platform.

In conclusion, the automation of payroll process is being pulled in contradictory directions. Payroll automation is asked for, by more organizations to support more regions globally, but also to make systems more efficient and tightly integrated. Technology has not been able to fully keep up with the speed of change affecting business. Even those organizations that achieve top performance in payroll processing in one country are struggling to meet the demands of a global environment.

To adapt to the changing landscape of global payroll technology, enterprises must:

  • Standardize business processes across the enterprise.
  • To reduce the effects of technology complexity, work on streamlining business processes.
  • Focus on standardizing all enterprise-wide processes, permitting exceptions only when required to meet local requirements (e.g., regulations, languages, currencies). Standardize the end-toend process, not just those activities that occur in payroll, for the greatest reduction in business and technology costs.
  • Make sure improvement projects support both globalization and efficiency goals: Any changes envisioned to help the payroll organization support global enterprise growth must be made with an eye toward whether they will also help streamline and support new capabilities.
  • Assess solutions based on their ability to support planned growth: New solutions such as those from cloud-based services may facilitate both global processes and new capabilities better if large amounts of transformation are expected. If the payroll organization uses an ERP system, investigate vendors’ plans for rolling out new capabilities and collaborate with them to create a roadmap for improving self-service and system integration.