Driving operational efficiency in HR, payroll and finance

Organizations across industries are under increasing pressure to operate efficiently while maintaining accuracy, compliance and a strong employee experience. Leaders in human resources, payroll and finance face growing complexities—ranging from multistate tax rules to fragmented systems and manual processes—that can slow operations and increase risk.

By leveraging process automation, smart system design and strategic outsourcing, companies can reduce administrative burden, improve accuracy and streamline core functions. In some cases, outsourced solutions can support long-term scalability and enhance performance.

Here are the practical steps that organizations can take to improve their HR, payroll and finance functions.

Streamline processes through automation and system integration

Process automation has the power to reduce the burden of repetitive tasks such as new-hire onboarding, time and attendance management, recurring journal entries, depreciation schedules, and payroll expense allocations. Workflow tools allow organizations to assign tasks, track progress and ensure every step in a process is completed consistently and on time.

Automation works best when paired with digitization and standardization. Shifting paper-based processes to standardized digital formats enables faster access, minimizes mistakes and improves transparency. It also provides the foundation for broader workflow automation.

Another major enabler of efficiency is system integration. Whether an organization relies on a unified platform or a mix of specialized systems, it’s essential that those systems communicate with one another smoothly. Integrated systems reduce duplicate entries and strengthen data accuracy, and allow teams to spend more time on strategic work rather than basic coordination.

In addition, organizations should create a strong documentation process. Standard operating procedures (SOPs) help teams work consistently—particularly important in high-turnover environments—and provide clarity around approvals, workflows and internal controls.

Enhance accuracy and reduce risk through strong compliance practices

Compliance remains one of the most significant drivers of administrative workload and risk exposure. Payroll, HR and finance face unique compliance considerations. Integrating compliance into day-to-day operations improves both accuracy and efficiency.

Key areas of payroll compliance include:

• Employee taxation and classification: Remote work arrangements, reciprocity rules and “convenience of the employer” policies often create multistate tax obligations
• Employer tax liability: Organizations must determine timing, payment methods and whether tax filings will be managed manually or via vendors
• Statutory pay requirements: Termination pay, vacation payout rules, paid family leave and holiday requirements vary widely by jurisdiction
• Lawful deductions: Employers must ensure proper approvals and understand whether deductions are pre-tax, post-tax or imputed

Integrating these compliance considerations into standard payroll processes reduces errors, decreases the odds of penalties and creates a consistent employee experience.

In addition, HR compliance plays a critical role in reducing organizational risk and maintaining operational efficiency. Employment regulations affect nearly every stage of the employee lifecycle, and missteps can result in costly penalties, employee disputes or reputational damage. Common HR compliance considerations include wage and hour requirements; employee classification; leave administration; documentation standards for performance management and terminations; and required policies, postings and training obligations.

When HR compliance is embedded into standardized processes, systems and documentation, organizations reduce variability, improve consistency across managers and locations, and strengthen defensibility. Integrating these requirements into everyday HR operations helps ensure compliance is maintained proactively rather than addressed reactively.

Finance teams must also maintain accurate reporting and internal controls across the following functions:

• Tax reporting (federal, state, local)
• U.S. GAAP or international reporting frameworks
• Bank covenant compliance
• Internal and external audit requirements

These obligations reinforce the need for accurate, timely financial records. They illustrate how strong processes can support efficiency and compliance.

RSM US Middle Market Business Index Special Report: Workforce 2026 found that, among executives who said outsourcing some functions or capabilities was one of their organization’s greatest challenges, the top functions they plan to outsource are:

Improve efficiency through strategic outsourcing

As organizations grow, many leaders find that outsourcing HR, payroll or finance functions allows them to alleviate administrative strain, improve service quality and redirect internal talent toward strategic priorities. By delegating administrative tasks, leaders can focus on growth, client relationships, sales and other mission-critical work.

The cost benefits of outsourcing can also be substantial. Outsourcing reduces the need for recruiting, training and maintaining internal administrative staff. In addition, managed service providers can offer reduced technology costs through economies of scale. Furthermore, outsourcing allows companies to scale support up or down quickly, which is particularly valuable for seasonal or fast-growing organizations.

Another advantage of outsourcing is that managed service providers often provide deep technical and regulatory knowledge—from multistate payroll rules to complex accounting areas like lease accounting or equity compensation. A good managed service provider can often introduce best practices, metrics and automation that improve accuracy and reduce cycle times.

Organizations can choose from several models depending on their needs. For example, a company can choose temporary support that adds short-term capacity or specialized knowledge. Another option is co-sourced support, when a managed services provider takes on certain functions such as employee relations, bookkeeping or payroll escalations. In contrast, the fully outsourced model is when an external team handles all day-to-day operations—such as payroll processing, accounts payable, reconciliations or HR administration—while company leadership retains decision-making authority.

The precise functions that a managed service provider offers will vary, based on whether the engagement falls under finance, HR or payroll. Among the tasks that a managed service provider can handle—again, depending on the type of engagement—are the following:

• Month-end close and journal entries
• Accounts payable invoice processing, expense reviews and corporate card management
• Accounts receivable payment application and reconciliations
• Payroll processing, audits, and quarterly and year-end reconciliations
• Benefits administration and employee onboarding/offboarding
• SOP creation and process optimization

Activities that remain with company leadership include the following:

• Policy approvals
• Vendor selections
• Credit decisions
• Disciplinary actions
• Strategic planning and oversight

This balance allows companies to offload administrative burden while maintaining appropriate leadership control.

First steps for organizations considering outsourced support

Companies that want to explore outsourcing options should assess their systems, pain points and integration gaps. Leaders must be honest about their existing compliance challenges and set realistic expectations while pinpointing the strategic priorities that outsourcing would address.

After this assessment, companies should dig into the nuts and bolts of the organization by analyzing their documentation, SOPs and process ownership. Leaders should also consider their transaction volume—such as payroll cycles, invoices and journal entries—and their organizational culture before engaging with a managed service provider. From there, the company can choose the appropriate model—staff augmentation, co-sourcing or full outsourcing—and design a tailored plan that aligns with organizational goals.