All About Payroll Finance

Similar to most financial aspects, payroll finance is an integrated function. A typical payroll finance scenario involves various stakeholders in an organizational hierarchy and records their action. For example, an organisation may be vested with 3 functions – Payroll Finance, Marketing & Sales and Field engineers. It is payroll’s responsibility to track their monthly efforts, manage incentives if any, adjust leaves and release their monthly salary as per the pay schedule of an organisation.

Financial section may vary in size depending upon organizational structure and the way an entity manages business. In large organizational setups payroll finance teams might be required to release LTA, Medical and other reimbursable amounts on Travel or for other miscellaneous activities.

Ideally, payroll finance team in any setup works around the pre-set policies of a company, keeping in mind the applicable tax rates and any other contingencies. They may undertake verification procedure in case they discover falsified claims or funds transfer. In order to avoid all such inconveniences it is advised to work around the policies & procedures laid by the company.

Professionals who are part of a payroll finance team include – CA, CS or MBA (Finance) and at times can be supported by HR professionals too. A high degree of compliance and fine detailing is required in every transaction that is managed by the payroll finance team. Minute mistake can raise incidents on unprecedented scale or may harm the brand equity of an organisation.

Most of the payroll financing sub-functions such as pay release, incentive management and efforts capturing has been automated by the robust technology systems. However, regular audits need to be done in order to ascertain system’s integrity and compliance with the laid out policies or regulations. Automation in the payroll industry has eased of the job of a payroll financing team member to a greater extent.