An amazing feeling, and a feeling that only payroll professionals understand. What they also understand, and what many outside of payroll don’t, is that the race is far from finished.

Of course, let me first link this to the overall best practice around Global Payroll Management. While all components are truly interlinked, the GPCF focuses on the section Risk & Control as part of the component Global Payroll Governance, and it is also linked to the section Objectives as part of the component Global Payroll Strategy.

I used to love designing and operating a smart set of controls, together with my team, These controls ensure that all the hard work getting the approvals out the door was not in vain. Let’s explore this final piece of the puzzle together.

The order is up for debate, the activities aren’t

Whenever a payroll is approved, there is a set of activities that need to be done:

1. Labour costs running through payroll should hit accounting.
2. Payments must be made to employees and government bodies.
3. Payslips (and other documents) must be distributed.
4. Statutory filings to government bodies must be completed.

All of these activities will have a due date; from the contractually agreed payment date to the internal financial close schedule, to the various statutory filing due dates. The time between the payroll approval data and those due dates will determine the ordering. But, no matter what, they always need to be done. So you need to mitigate any risks that can inadvertently impact this with a set of sound controls.

Getting over 60% of the total P&L in the accounts

For most organisations, the costs that run through payroll represent over 60% of the total Profit & Loss (P&L). Just let that sink in for a moment. This data point alone should justify investment into the global payroll process and controls which impact the overall financial performance of the organisation. Just a tip: I always used this data point (with supporting data) in any business case made.

The basis of the General Ledger (GL) files has always been, and will likely always be, the Gross to Net (G2N) report, making it a crucially important report in any business environment. The GL files are based on the G2N data and typically mapped to the Chart of Account (CoA) in line with the accounting principles. This GL file with the CoA should then be in the format of the target Finance ERP (e.g. SAP, Oracle Netsuite, Workday Financials).

This all sounds too easy, right? It really isn't. When you operate a hybrid payroll provider service delivery model you inherently use different systems across the landscape. While in my experience this hybrid approach is the ‘one-size-fits-all’, without a global payroll management platform like ours you will have a hard time keeping your friends from Finance happy. Here’s why:

• Global Aggregators often sell a level of standardisation, but in reality fall short; typically in the area of integration to accounting. The “bespoke” GL files are either not possible or very, very costly.
• Local providers are great in offering the best services, but do all operate a different local payroll engine. And those engines can create a sort of GL file, it will vary country by country and can often not meet all global requirements.

So, where does this leave you? You guessed it: you can use our platform to keep the flexibility of the best service, while creating very rich, accurate, and instantly available GL files. Heck, you can even just give your friends from Finance self-service access to run the GLs and reconciliation reports themselves (either with or without employee-level data). Your GL files can include primary and corresponding accounts, local and/or global account description (i.e. for US/Dutch/German GAAP), order by department, cost centre, location, country worker type… finance’s dream. And, you can complement the G2N data with additional data such as accruals, provisions, and costs paid outside of payroll (i.e. expenses) for completeness. 

All the controls leading up to payroll approval should give finance the confidence that the data is accurate. With our self-service global and local reporting (e.g. multi-currency, multi-country, local pay codes, global pay codes) they have all the reports at their fingertips available. This allows the global payroll teams to run tight controls around GL files and reports.

Getting the world paid, quite literally

Now that those labour costs and liabilities are in the general ledger, there are liabilities that need to be cleared. This often means payments to employees and any other third parties such as government bodies, benefit providers, and pension providers. You will need to reconcile these liabilities to the data that was approved, and often get additional (finance) approvals before the files are processed. It has to be 100% accurate and 100% on time: zero tolerance for errors. We need to flood the world with money for the economies to spin: just think about it, if payroll didn’t pay, where would the money come from? Yep, payroll rocks!

But please don’t tell me you get those payment approvals done via email or your favourite chat channel (e.g. Zoom Chat, MS Teams Chat, Slack). You want to run this as part of the same access controls and audit trail workflow as you have done for all activities leading up to payment approval.

That’s why we at Payzaar have made our workflow so tailored, that you can not only set the order of activities (as that will differ per country and even entity) but also assign different tasks and actors to specific workflow stages. You need to get a payment backed up with source files (e.g. approved G2N, statutory filing, invoice) before you submit this for approval. This is an evidence control that all global payrolls must operate. And with Payzaar this is digitised and standardised, while allowing for local nuances. Brilliant, right? I think so.

Not that anyone looks at them, but you have to distribute payslips anyways

No, this isn’t a joke. I once ran an internal benchmarking exercise to understand how many times employees looked at their payslips. The results were… not surprising yet a bit in your face: 10% always looked at their payslip, and 40% only when they expected a new pay (i.e. increase, high bonus, commission). So payroll professionals know, you don’t do this for the recognition overall, but it has to be done.

For me personally, I always found the payslip distribution process a risky area: What if they get distributed too late or too early, before pay? Or, what if the wrong payslip was sent to the wrong employee? So, getting this process as automated and controlled as possible across your entire scope is crucial, regardless of whether the employees look at it.

I used to have a control which had a confirmation that all payslips were distributed (even back in the early days via post), or loaded to a portal of some sort. What we do at Payzaar, is always offer a range of options:

• Enable sharing of payslips between you and your provider (of choice) through a dedicated workflow stage. This is heavily used by our customers, as they also use it as an audit log for the providers to confirm they have been distributed (e.g. if they use a local portal).
• Distribute all the payslips automatically to all employees, regardless of location of payroll provider used, via our self service Employee Portal (available in customer branding).

These choices allow for ease of mind in this highly sensitive yet underappreciated process.

The statistics that feed geopolitical decisions: statutory filings

Hate ‘em or love e‘m, they gotta be done! The statutory filings once payrolls being run, truly are the last activity that closes the payroll cycle. What most people outside of payroll don’t know is how complex and diverse these are across different countries (and within countries). Some countries have over 5 unique filings per period to different government bodies, and some “just have one per period”.

To give an example of my little country, The Netherlands: up until 2006 there were multiple filings to multiple government bodies resulting in multiple payments. From 2006 onwards, this was consolidated to one filing and one payment: to the Dutch Tax Authorities. 

Don’t ask ChatGPT as it doesn’t now, so let me tell you: for each filing and for each employee there are over 130 unique data points. I once ran a payroll of 30,000 employees in The Netherlands with monthly filings (but often at least 13 in a year). This results in (get your calculators out) over 50 million unique data points! This is more than just a filing, as this data is then also used by the Central Bureau of Statistics (CBS) to feed into government processes and decision-making. Governments therefore love to audit organisations that either file late, incomplete, with errors, or too many corrections.

Yes, that is how crucial the aorta of payroll data is. And yes, that is why the payroll DNA focuses tirelessly on the accuracy of its end-to-end data.

When you operate a global payroll and the CFO asks: “Do we comply with all the filing requirements across our scope?”, you want to confidently answer: “Yes, and I can evidence it”. Especially that last part is crucial:

Trust but verify, seeing is believing.

I used to manually collect all the actual filing evidence (meaning a system-generated report of the filing and a filing confirmation in any government portal). My team and I tracked all of this in spreadsheets to just have a piece of mind. With Payzaar, you have a very intuitive compliance dashboard that does all of this tracking for you. The compliance dashboard is triggered by a compliance calendar listing all the filings per country and entity with their due dates. This is then linked to a specific workflow stage where the evidence is uploaded and once uploaded, the compliance dashboard is updated. Just imagine you can show your manager or leadership, and say:

“Yes, we are in control and compliant”.

So, what now?

Alright, we have beaten Europe to its Final Countdown and are not heading to Venus but to a well-deserved “in-between cycles break”. You’ve earnt it, and have all the control evidence in place to welcome the auditors to inspect yet another successful cycle. Then, hopefully, you can enjoy the best sound in the global payroll: the sound of silence. This means accounting got what they wanted, the employees got what they wanted and were promised, and the governments too.

And you also deserve a break from me preaching about controls. So, here’s a summary of the 5 blog articles in this Global Payroll Control Framework series in case you just want to refer to them in the future to educate yourself (or your stakeholders):

1. GPCF Blog 1: This is how to operate THE Global Payroll Control Framework with Payzaar
2. GPCF Blog 2: Your third and fourth eyes shouldn’t be the ones in the mirror
3. GPCF Blog 3: Rubbish in? Angry, disappointed employees out!‍
4. GPCF Blog 4: Take your passion, and make it happen: Get that payroll approved with a smile
5. GPCF Blog 5: Well, that's the one you are reading right now: The sound of silence in global payroll is like music to my ears

I hope you enjoyed reading along just as much as I have enjoyed writing this. Do give me some feedback, as that truly is a gift! Thanks for supporting me. I hope to see you at our next Payzaar On The Go event in Warsaw. Stay tuned.

I am a Global Payroll Professional and a passionate one too! After managing global payrolls across the world for about 20 years, I found there must be a better way of doing this. I joined Payzaar - the global payroll management platform everyone needs and can easily implement.

Oh yes, we are just fun to work with too - Let's chat about the Payzaar Experience! And who knows, I might just deliver you a demo that you’ll truly enjoy.