What to Know About Consolidating Global Payroll Providers

Managing Global Payroll

If you are managing payroll in one country or multiple countries, you know global payroll is challenging – maintaining compliance, quarterly or annual regulation changes in each country, reporting, and visibility into the cost of payroll in each country. Most companies with U.S. payroll don’t understand the complexities of managing multi-national payroll until they start new operations overseas. The payroll and tax nuances of each country can be difficult to manage and compliance risk increases with each new country and new employee.

Many companies manage international payroll with payroll providers or accounting firms within each country. The problems that arise with utilizing new vendors in each country are many – from disparate technologies, no aggregated reporting, no visibility into the costs of payroll for each country, tax and accounting audits, language barriers, foreign currency and money movement and much more. Even though the employee and financial data is highly sensitive, most payroll providers continue to use spreadsheets and email to transfer this data across borders. Depending on the country, fines and penalties for non-compliance can be high and the risk increases exponentially. Would you use this manual process and accept these limitations for U.S. payroll?  Of course not! A great first step to get global payroll under control is to utilize technology and consolidate providers.

Where to start?

Once you’ve decided to consolidate, where do you start? For small and mid-sized companies, finding payroll providers in each country can be difficult. Depending on the type of business entity, number of employees, language barriers in the country, and launch time, the process of selecting a vendor in each country takes time. Using a payroll aggregator can get payroll set up quickly, because the aggregator has completed the vendor vetting process and has relationships in the new country.

There are many payroll aggregators in the market offering global payroll solutions, but selecting the right payroll aggregator is crucial to long-term success of your global business. You should start by looking for a payroll aggregator that offers technology to solve your payroll headaches, reporting solutions to offer real-time visibility into the cost of payroll within each country, and access to the in-country providers when you have questions about a specific country.

Now What?

Once you’ve decided to consolidate your payroll, reporting is a critical tool to manage the global payroll costs. Knowing what you’re spending in each country, ensuring employees are paid accurately and on time, and seeing a view across all countries is important to keep your global business on track. Make sure the payroll aggregator offers real-time reporting and views across countries so you can easily manage the global payroll expense and make changes when necessary.  You should ensure the data is in the local payment currency, and so is the currency you post to your General Ledger.

Another aspect of the payroll aggregator is that they manage the relationships with the in-country providers. While that is helpful in day-to-day operations, questions can come up from time to time. Having access to the in-country providers is crucial to save time and resources when questions arise, so make sure your payroll aggregator allows you direct access to in-country experts.  There is no one company or one person that knows everything about global payroll.  Why work with a company that gives you one resource for your global payroll?

If you are just starting to launch into new countries, or have been managing global payroll for years, there are new technologies and solutions that can help run your business faster, smarter, and more cost-effectively. Global payroll should not be a barrier to international growth – the right payroll partner will manage your international payroll so you can focus on growing your business.

Here is the webinar recording: https://youtu.be/cGyYz7PwSyU