Global payroll reporting helps multinationals oversee their international payroll operations. Without detailed payroll reports, it’s impossible for the management level to understand what is happening in different geographies and how high their global payroll expenses are.
But getting detailed global reports on payroll spendings and other payroll-related insights is a challenge for many organizations with a multi-country payroll. So, how can businesses manage their global payroll reporting in a way that is not only efficient, but also leads to comprehensive insights?
Global payroll reporting comprises payroll reports for internal purposes (financial insights, workforce management, and more) as well as the payroll reports businesses need to file to tax and social security authorities to meet their corporate reporting obligations.
Both internal and government reporting are more complex for businesses to handle if they run a global payroll, especially since there are different types of payroll reports that are required in different countries, which creates even more complexity and makes it more difficult not to miss anything.
Internal global payroll reporting can be seen as the process through which raw payroll data is turned into valuable insights that the business can use to its advantage. This typically happens through payroll analytics.
Applying data analytics to sets of payroll data allows organizations to gain insights into trends and patterns that can provide an overview of the business’s overall situation.
In order to fulfill its true potential, global payroll reporting should:
Provide insights on the micro and macro level, allowing for comparisons between different countries (and even regions) as well as for granular insights into country-specific metrics
Be accurate, unified, and, if possible, be provided in real time
Look at more than just wages and salaries to provide holistic insights into all payroll-related aspects
Be standardized, i. e. show the same cost factors and pay elements for all geographies
Allow for customization so that reporting metrics can be added and adjusted as needed
Give easy access to payroll data at all times
In short, global payroll reporting should provide a consolidated overview of payroll processes and data across all operating markets.
Regardless of whether the aim is to use the data for internal purposes or to meet country-specific reporting requirements, global payroll reporting isn’t without challenges. And one of the difficulties of gathering the necessary input for global payroll reports is a global payroll challenge international businesses know too well.
In many cases, the compilation of multi-country payroll reports is made difficult by the fact that the business has outsourced its payroll to different in-country payroll providers. Working with multiple payroll vendors results in:
Different pay elements listed by each vendor
Non-standardized data formats
High security risks when transferring data from the vendor’s system to the business’s central HCM, and vice versa
Fulfilling the different reporting requirements for global payroll isn’t less difficult. Operating in different countries means having to follow different rules, observe different deadlines, and be familiar with the different types of reports that are needed.
Overcoming these difficulties might be challenging, but businesses that succeed in drawing up comprehensive global payroll reports can unlock valuable insights. Mastering global payroll reporting is crucial because it:
Transforms raw payroll data into detailed insights that inform business decisions regarding strategic workforce planning, new target markets, withdrawing from long-tail countries, and more
Provides insightful cost analyses that allow organizations to know how much money is spent in which geography, which enhances global cash flow management
Is an essential part of global payroll compliance, since consolidated payroll data helps prepare for audits and compile accurate payroll reports for local authorities, and ensures the necessary data visibility for businesses to self-assess if they comply with all the legal regulations
Gives businesses a means to evaluate the service quality of payroll vendors
Shows organizations what is going on in payroll in different locations, which facilitates global payroll management
Using global payroll reporting software or a unified global payroll platform that automates data flows and consolidates multi-country payroll data in a centralized database is usually the best approach to handle payroll reporting for global companies.
43 percent of companies with global operations work with between two and five different payroll partners. Depending on the employee count in the respective geographies, putting together the different, non-standardized sets of data manually is a very daunting prospect. Not only because it’s very time-consuming, but also because the risk of errors is very high.
The higher the number of employees and geographies an organization needs to oversee, the higher the need for a global payroll solution that offers a range of reporting capabilities and simultaneously uses payroll consolidation and payroll automation to reduce the need for human intervention.
At the same time, in-country payroll partners can ensure country-specific reporting obligations are met at all times. Organizations that insist on managing their global payroll in-house should work out a global payroll and compliance calendar that details all the different deadlines that need to be observed in the different countries.
The Lano Academy is for informational purposes only and should not be construed as legal advice. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this article.
BECOME A PARTNER
© Lano Software GmbH 2023