Centralised Payroll

by HR Future, February 10, 2010.

The recent release of the King Code of Governance Principles and the King Report on Governance (King III) emphasises the importance of mitigating risk, particularly with regard to auditing and ICT processes and systems. In particular, it places the spotlight on the fact that sustainable business can only be achieved if it is supported by effective management of risk.

To improve the risk profile of a company, organisations have to look at the processes and systems that pose a threat and then mitigate them. One such system is payroll.

Today, many corporates have decentralised payroll systems with various subsidiaries running their own systems in a disparate fashion. This has come about as a result of the continuous expansion of organisations. Where growth has taken place by means of acquisitions, for instance, this has led to disparate ICT infrastructures and payroll systems with HR and financial departments using different systems to pay employees.

This poses a risk to the organisation as disparate payroll systems do not lend themselves to a healthy organisational risk profile, preventing proper controls and transparency being achieved.

The answer is a centralised payroll based on an enterprise system. To drive the implementation of good corporate governance throughout the organisation, including all subsidiaries, it is ultimately up to the board to ensure that a single solution is implemented company-wide. This will enable all subsidiaries to report into one system, while simultaneously creating a transparent, reliable, structured and lower-risk system…(continue reading)


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