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Payroll advice for a CFO new to HR

The finance department's involvement in human resources is not a new trend. In 2011, nearly one-fifth of CFO's surveyed by Robert Half Management Resources said some element of HR had become part of their job in the three years prior. Since then, finance is even more intertwined with HR at a number of companies, including CFOs and company vice presidents taking a larger role in job interviews and hiring decisions.

Another of HR's primary tasks involves payroll, an area professionals with finance backgrounds understand. However, managing a company's payroll can be complicated. Here are some payroll strategies and tips for CFOs new to HR:

1. Track profits and loss on a regular basis
CFOs are accustomed to receiving regular business updates. Coinciding those updates to be released at the same time as the company's payroll is a good way to regularly examine the company.

Keeping an accurate and current profit and loss statement gives the CFO a strong indication of how well the business is doing every month, Forbes suggested. Given the number of expenses a business has, such as payments to employees, taxes and company purchases, it can be challenging to know constantly what the financial situation of a company looks like. A regular review gives CFOs that snapshot and assists in determining what costs are too high if expenses need to be cut. Creating and reviewing these statements at the same time as regular paychecks are distributed allows the information to be current, both from a finance and HR perspective.

For HR workers without a finance background, seeing regular updates on the company's profits and losses allows them to gain a better understanding of how the business is doing and where efforts to improve profits should be concentrated. 

2. Create expectations by position
A well-run business pays an employee based on how much he or she is worth to the company and how well each person performs in his or her respective job. This is an area where an executive with both a finance and HR background plays a major role, as both of those departments should have a say in determining the value of each position, The Harvard Business Review said.

By reviewing a variety of factors, including past performance and predicted future success, the CFO determines  how important a role is and where that employee should fit on a pay scale. Measuring that against the company's current salary structure shows where funds are being wasted, which jobs need to be invested in more and how to better manage the payroll.

3. Knowing what software the company needs
Payroll and benefits can be complicated to deal with, which is the reason businesses rely so heavily on software. It's essential HR has a customized program, especially given that not everyone within the company will have the same salary and benefits needs.

Rhonda Abrams, president of The Planning Shop, told Inc. magazine that when choosing payroll software, a company has to know its needs. For example, a business with employees all located in one office will have different priorities than a company with personnel in various places.

"You always want to consider the features that you particularly need," Abrams said. "You want to make sure it can handle the different kinds of employees you have."

CFOs new to the HR department should review their company structure to ensure they have a strong understanding of what needs they must have fulfilled. Then compare those needs with available software programs they may choose to buy. That will make their selection a better one, allowing HR to improve management of their payroll and benefits. 

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