Many of us did not initially set out to lead payroll, yet here we are. Like many others, an unexpected organizational change placed me in charge of payroll. If you find yourself in a similar situation, you’re in the right place.  

As a top payroll decision-maker, you are now in charge of one of the most vital, intricate, and often overlooked functions within your enterprise. While you don’t need to master the specifics of processing each payroll, you do need to understand how to oversee it effectively. 

I’d like to start with a point that may not be obvious: employee wages are one of the largest expenditures in your organization. It is also one of the most highly regulated, scrutinized, and emotionally charged areas. Wages shape collective livelihoods; they’re how groceries, housing, and the necessities of life are paid for. From the employer’s perspective, payroll errors can cause regulatory compliance risks, employee strife, audits, reputational damage, and in some jurisdictions, criminal liability.  

Now, with all that being said, I’m sure you’re wondering what it means to be accountable for payroll. 

You’re Not Running Payroll, You’re Governing It 

Payroll is infinitely more than pushing a single button to process paychecks. Your payroll team is deep in the weeds, managing never-ending weekly, biweekly, monthly, and off-cycles, often all at once. They’re balancing details down to the penny, aggregating and reconciling data from dozens of systems, gathering input from innumerable stakeholders, and racing against deadlines to process a single payroll. They’re absorbing chaos and producing precision. 

Your role is different. You’re likely not doing the tasks to process paychecks. Instead, you’re asking questions, ensuring the right controls are in place, empowering the right people, and managing risk. 

Where to Start: Mapping the Landscape 

Let’s start by understanding what you’re governing in payroll by asking the following questions: 

• How many payrolls do we run? Across how many states, countries, entities, and cycles? 

• Who’s on the payroll team? What are their roles, and who do they report to (it may be indirect to your new team)? 

• Who are our key stakeholders? Does finance, HR, IT, legal, operations, and shared services all have touchpoints with payroll? 

• Who are our vendors? This is so much more than technology because there are consultants, banks, tax agents, benefits partners, garnishment support, and more, which will often vary by country and even entity. 

• What’s our delivery model, and does it vary by region or business unit? Is it in-house, co-sourced, outsourced, shared services, embedded, a center of excellence (COE), or even most of the above? 

• What’s the annual dollar value that we payout on behalf of the company? 

This is all about visibility and awareness. You need to know who’s who within your organization. 

The Real Challenge: Preparing Data for Payroll Processing 

Harmonized, modern payroll systems can calculate gross-to-net in seconds, compared to the hours or overnight turnaround of days past. That’s the easy part. The hard part is getting clean, timely, and accurate data into the system.  

The data comes from everywhere: HRIS, time and attendance, benefits, compensation, employee tax forms, banking, and more. Often, the data arrives in a jumbled mess of spreadsheets, interfaces, emails, and even paper submissions that your team must sort through and transform before they can begin processing. 

This is all just for one payroll. Multiply this by every country, legal entity, pay cycle, etc., and you start to see the scale of the payroll team’s regular undertaking. 

I once worked with a client who had just upgraded to a modern payroll system capable of calculating gross-to-net in seconds. During one cycle, I watched their payroll team spend nearly two full days just preparing the data, including chasing down time entries from three different systems, reconciling benefits updates from HR, and manually entering tax form corrections that had come in via email and even paper. The system itself was extremely fast, but the real challenge was getting clean, timely, and accurate data into it. And that was just for one country. Seeing it firsthand gave me a whole new appreciation for the scale and complexity these teams manage every single pay cycle. 

Governance Questions to Consider 

Your role is to ask the right questions. Consider the following:  

• How good is our data integrity? Where does our payroll data come from, and have we automated this or is it manual? Who approved it, and how does the payroll team validate it? 

• Who are the vendors involved? How do we know they’re meeting our expectations? What’s their error rate? How’s our experience as a customer? Are they responsive, and do they run a well-managed service for us? 

• How do we know we are compliant? Are we meeting our local regulatory obligations? Are we following the required privacy schemes? Have we adhered to our agreed-upon internal controls? 

These questions aren’t just operational; they’re strategic. They help you understand where risk lives and where you should focus mitigation efforts. 

Metrics Matter 

You’ll hear a lot about accuracy; 98.5% – 99% perfection is table stakes for payroll. Follow up with these questions: 

• Do we pay wages, send remittances, and file paperwork timely?  

• Do employees trust the payroll function? This one is often hard to measure. To be fair, payroll often takes the blame for errors that occur far outside their scope of responsibility. This, however, is a good indicator for the overall health of the payroll function that should be a guide to direct you towards risks you might need to mitigate. 

• For the errors identified, has the team done a cross-functional root cause analysis? Was the process collaborative?  

• Do we focus solely on the final accuracy of the pay run? This misses the heroics your team may be required to deliver to achieve success. Focus on both first-time or first-pass accuracy and the final accuracy. This gives you a solid indication of the complexity your team is managing and often the effort involved. Look at cycle times as well for an indication of the level of effort required to sort, cleanse, and format all the inputs.

The importance here is not to finger point or to blame. Payroll often gets blamed for problems they did not create, so the intent is to come together to solve challenges and ensure improvement rather than continuing to make the same errors.  

Your payroll team is under constant pressure, often self-imposed, as they take their great responsibility to heart. They’re managing multiple cycles, juggling conflicting priorities, and responding to urgent issues in real time. While their leaders are pushing the emergence of AI, your payroll team rarely gets the chance to look up and think strategically. Your support—in the form of resources, recognition, and engagement—will make a meaningful difference in their day-to-day tasks. 

This article only begins to address the complexities of payroll governance. You’ll need to explore finding the right operating model, identifying the right vendors, keeping pace with evolving compliance obligations, simplifying and transforming payroll, building the right governance framework, and reviewing whether you have the right team and level of expertise. 

For now, start with visibility and absorbing all the information. Resist the urge to make quick, sweeping changes.  

Know your stakeholders. Know your risk. Above all, know that payroll is not a basic back-office function. Payroll is a core foundation of your enterprise.

Joe Ranzau is a Partner at Grant Thornton.