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For a long time, payroll and payments have existed entirely separately. But now more than ever, they are being unified – and it’s easy to understand why.
All over the world, organizations are finding that pay has huge potential as a driver of streamlined processes, maximized efficiency and enhanced employee experiences. To make the most of this opportunity, unified pay solutions that bring global payroll and payments together in a single platform are gaining traction. They’re also delivering benefits across financial well-being and flexible pay options through the ability to incorporate innovations like pay on-demand.
This blog takes a look at the most compelling reasons behind integrating payroll and payments, and the data that shows how integration is driving improvements in timeliness and accuracy.
The facts around aligning payroll and payments
Last year, we included the metrics of payroll timeliness and accuracy in our Global Payroll Efficiency Index (PEI) report for the first time, reflecting the increased importance of the relationship between payroll and payments. In the 2023 PEI report, we found that 99.02% of payments were made on time, but this year’s report has uncovered an increase in that rate to 99.28%.
As more and more organisations invest in transformation to increase efficiency, streamline processes, and advance the employee experience, this data shows that unified pay solutions, which consolidate global payroll and payments under a single umbrella, are uniquely situated to drive all three of these objectives.
At CloudPay, we have offered global payments services to our customers for a number of years, and our findings from these reports have given us clear evidence that integration and innovative technology are delivering tangible improvements.
Where unifying payroll and payments can really make a difference
The fixed nature of pay cycles means that payroll and payments are closely linked. For example, if there are any delays in payroll processing, due to data input issues or other problems, then the amount of time Payments teams have to execute their functions is reduced. This puts them under more pressure, and can potentially lead to more mistakes and delays creeping in, the impact of which can filter down to employees that depend on being paid correctly and on time.
From our experience, the risk of these delays and problems can be minimized, or even removed entirely, through the unification of payroll and payments. Consolidating payments and payroll solutions enables better streamlining and control of processes, while innovations such as instant payments and alternative funding options can make a real difference in generating breathing space within each pay cycle.
There are three areas in particular where we see unification is having a real positive impact:
1. Greater visibility
Unification delivers the vital insights that payroll and payments teams need for better decision-making and visibility of performance. A good, unified solution will contain real-time analytics and reporting tools that allow both parties to explore trends, patterns and anomalies within each cycle.
This means that pain points can be identified and improvement efforts are focused in the right places. At a time when nearly 45% of payroll leaders say they lack visibility into payroll operations, this can be a real differentiator.
2. Better employee experiences
Delivering quality, stress-free employee experiences in every area has never been more important, especially for attracting and retaining the best talent around.
Pay-related problems are a common source of dissatisfaction, so using a unified solution to minimize those problems, and deliver benefits such as pay on-demand, can improve employee well-being, and by extension their motivation and productivity. In particular, a unified solution makes it easier to adapt to changes and last-minute requests in pay cycles, and to ensure benefits and deductions are always administered correctly.
3. Giving time back to payroll teams
The efficiency, automation and streamlining that unification provides can free up a huge amount of time for payroll and payments teams that often struggle with a high administrative burden. Complicated and time-consuming tasks like maintaining tax filing compliance and benefits processing can be taken care of by the solution, which gives staff members the time to add value in more strategic work where expert skills are needed.
Explore the PEI report
With the right unified solution in place, organizations are far better placed to make their pay processes faster, more flexible and more certain. They can enable a seamless flow of data and processes through payroll and payments; efficiently maintain full compliance with all relevant regulations in every territory; and make sure that every employee, wherever they are in the world, always gets paid accurately and on time.
Explore the role of payments accuracy and timeliness in more detail, and discover the latest global benchmarks in payroll performance, by reading our 2024 Global Payroll Efficiency Index report.
To learn more about how CloudPay can transform your payroll operations by unifying your payroll and payments, get in touch and discover the future of payroll today.