Payroll and payments are, and will continue to be, one of the most frequently outsourced business processes.

With second generation business process outsourcing (BPO) providers maturing in their offerings, we expect payroll to become more than a repeatable and necessary process. Many payroll service providers are developing and implementing strategies to utilise payroll data to support business intelligence and decision-making.

Generally, payroll reports to either HR or finance. The linkage with HR is critical for personnel data, certain payroll deductions, policy and processes, remuneration, and so on. Integration with finance for the general ledger, tax and accounting, and compliance with accounting regulations is also vital.

Other alignment, with IT support and internal audit, is also important. This creates a very complex environment, and no matter where payroll reports formally, the relationships with these internal functions need to be established and governed.