4 key reasons to manage your multi-country payroll on a tech platform

January 11, 2023 | 5 Mins David Daly

A lot of large or growing organizations today operate their international payroll service payroll across multiple countries and tax jurisdictions- and this is proving to be a very challenging environment in which to work if you do not have digital technology to manage the process.

An over reliance on manual inputs, spreadsheets and emails is quite common at multinational companies today when it comes to payroll processing. There is a big challenge around how to manage it all and choosing to manage each individual country in a different way only leads to increased complexity and reduced visibility.

Consolidating your multi-country payroll onto a single platform and housing all of your data, global employees, and processes in one place is the solution to a lot of the complexity associated with global payroll delivery and management today. In this article, we will take a look at four reasons why you should be managing your multi-country payroll on a technology platform.

1 Better vendor management

Local country expertise will always be required to deliver multi-country payroll. The local country vendors or payroll partners are the ones with the local labor and tax knowledge, they are the ones who pay the employees on the ground in local currency and keep everything ticking over.

As a company grows and scales, there is often a need to engage with new local country vendors, this can build up into a sizable number and the result is complexity, it is simply a challenge to manage it all.

Choosing your own vendors and managing them on a global payroll control platform is a technology solution to this challenge. To manage local country payroll and vendors, you first need to be able to see them. Integrating them onto a single platform with a single interface, allows for much better visibility and control as well as country by country reporting.  The ability to swap out and change any underperforming vendors is also welcome. This is all about ensuring that the global employer has choice and control when it comes to their vendors. They are the ones paying the vendors for their services so they should not be restricted in any way, they should be able to manage them on their terms and in the simplest way possible. This can only really be achieved on a digital cloud platform with innovative digital tools designed specifically to manage local country vendors with operational efficiency.

2 Real-time data for bigger picture insights

When international payroll delivery and management is split by country and fragmented across a range of different systems, with no integrations connecting to a centralized global payroll system to key players like local country payroll providers and HCMs: you end up having to piece together the relevant data from multiple different systems in operation.

Unsurprisingly, this is laborious and time consuming. It is also piecemeal manual work, various parts of the puzzle will come together at various different points and rarely if ever do they merge into a cohesive whole in the form of easily digestible and fully understood payroll data, metrics, and reporting–and it is definitely not in real time because it is usually a case that different individuals in a payroll team are tasked with bringing different pieces of this puzzle together over time.

The end user is often left with days or weeks old data telling an incomplete picture. Data that is unable to reveal the bigger picture insights and story behind the payroll costs. This is what happens when you have different processes and non-standardized data in operation for individual countries and no strategic plan to consolidate your payroll countries onto a single platform for easier data management and consolidated multi-country reporting.

The solution is to standardize your data and then make it easily extractable into comprehensive reporting via smart reporting tools and analytics. Such tools are usually available on a cloud based global payroll control platform. Only when your data and reporting are consolidated across all of your payroll countries, do you have the ability to drill down into the specifics on a micro level but also zoom back out to see the bigger picture on a macro and global level. This is the kind of reporting required for informed decision making in real time.

3 Improve cost visibility and comparison

Another reason to consolidate all of your global payroll countries into a single usable system, is to be able to benchmark or compare like with like when it comes to labor costs across countries.

Standardized data and processes mean that everybody is working with the same data and process across all of your payroll countries. This lends itself to detailed, consolidated and comprehensive multi-country reporting. The kind of reports that can be viewed in real time and often in a single currency.

This lets global payroll managers and business leaders compare and contrast labor costs across countries. It enables them to see the true cost of labor and take into account all of the unique pay elements associated with a particular country should they wish to do so.

It makes it much easier to spot trends and anomalies, as well as come to conclusions about costs in specific countries. This kind of reporting can even indicate specific locations where companies could choose to locate workers for financially advantageous reasons. Only when you are comparing like with like can you make real time decisions based on accurate data. You are seeing a fuller and more complete picture instead of attempting to compare different data formats showing different things from different countries. The standardization of data and process in global payroll delivery and management makes visibility and transparency a lot cleaner, neater, and understandable.

4 Make compliance easier to manage

Compliance challenges around global payroll data and management are on the rise at multinational companies around the world. This is fully understandable as we are now deep into hybrid working models and a much-changed working culture and office environment. All of this has resulted in significant changes to recruitment strategies and how workers are on boarded and paid in globally diverse locations.

Anything that involves more people, data, rules, and regulations will result in more compliance. This compliance needs to be managed on an individual country local payroll level as well as a global level, this is the responsibility of the global employer regardless of who they may outsource work to or partner with.

Consolidating your global payroll countries onto a single platform and viewing them with standardized data as well as operating with standardized processes will make visibility, transparency and control a lot easier. Many companies today are flying blind with limited access to data that proves they have met their compliance obligations on a local and global level-this is due to non-standardized data processes and the use of multiple disparate systems which are not integrated with one another. It is very difficult to see compliance happening in a situation like this, let alone manage and report on it to the relevant authorities.

Consolidating your payroll countries, using standardized data, and operating with the same process will naturally lend itself to tighter compliance controls and enhanced visibility. Digital platform technology should also be leveraged here as the use of helpful compliance tools such as digital audit trails accounting for who interacted with payroll data, when, where and why can also be very helpful.

For information on the Payslip Platform contact us today.

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