Payroll reporting to HR vs Finance

Kwhite2001

How many Payroll departments are reporting to Finance vs Human Resources?
I have never worked for a company that had the payroll dept. report to Finance. I would like to know if reporting to Finance could be a conflict or cause problems in auditing. My concern is that sensitive issues that should be kept within the parameters of HR are being exposed to Finance personnel. Please post any similar experiences! Thank You

Down_the_Middle

I personally prefer to have P/R report to Finance. There's a better check and balance and internal audit than if HR supervises that function. I've worked with it both ways, but prefer the reporting to Finance route.

Gillian

Ditto to Down the Middle. I, too, have seen it both ways and prefer that payroll report to finance because of the checks and balances. If you have a good payroll person that person should be just as capable of maintaining confidentiality as a good HR person should be.

Carol CA

We've had it both ways. Initially payroll reported to Finance, and then it was transferred to HR. One of the reasons it was in Finance in the first place was due to the auditing. The theory was if payroll is in HR, techinically you could "hire" a fake person and pay them and no one would know. If the payroll is in Finance they could catch something like that.

You are correct to be concerned about confidential information. This is where you need to train and trust your people. Just like people in HR have to keep information confidential, if the payroll person is in Finance, they have to learn to keep the information confidential. It is wise to limit the exposure as much as possible.

Good luck!

bsa

In my last 2 positions, payroll reported to the Accounting Dept. with a dotted line to HR. Both Accounting and HR reported to VP-Finance.

Caroliso

In my company payroll reports to Finance, but personnel changes (hours, etc.) are reported to HR and HR communicates the resulting payroll changes to the Payroll Administrator. This provides a nice check and balance system.. HR reviews payroll once it is processed, and also does periodic reconciliations, with any discrepancies reported to Accounting.

The concept of confidentiality that applies to HR also applies to certain aspects of Finance, so that quality should be a principle of both departments, with a very high priority obviously placed on it in the Payroll position.