Payroll data is often overlooked in keeping a business financially aware during difficult economic times.
“Not only can the data gleaned from payroll functionalities allow for the business to streamline costs, but it can provide significant control over planning, accounting and management,” says James McKerrell, chairman of the South African Payroll Association (SAPA).
According to McKerrell, the payroll function manages a large portion of the most valuable information inside the organisation – data. The data allows the business owner to understand trends and make strategic decisions based on the costs of employees and their roles within the organisation.
Employee morale boosted
By analysing payroll data effectively, business owners can determine trends in employee costs such as with standby, overtime and shift allowances. Payroll data and comparative reporting against productivity and historical data lets the business owner potentially establish how a particular overtime cost could balance the cost of hiring new employees.
“This then has the knock-on effect of leading to improved productivity as employees who constantly work overtime are often tired and stressed which leads to lower performance, work quality and morale,” says McKerrell.
Employee costs kept to a minimum
Payroll data can also show whether hiring a freelance or contractor would either increase or reduce costs. Often contract or freelance employees are more expensive than permanent employees. However, if the business requires once-off or short term support for additional skills on a project basis, this data can reveal how costly it is and allow for the organisation to factor these overheads into their quotations or projects.
“When management gets sight of this information in a real-time environment, strategic decisions can be implemented far more effectively,” advises McKerrell.
Payroll data adds value to the business in the form of better productivity, improved cost control and long-term financial management. These are valuable boxes to tick, especially