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Multi-country payroll management is a big challenge for multinationals and smaller organizations with globally distributed teams alike. There are various compliance pitfalls to avoid and the multitude of processes, service partners and systems make it hard to keep tabs on the entire operation.
When businesses operate across different geographies and have to manage payroll in various locations, payroll consolidation can be a real game-changer. By consolidating payroll for global teams, organizations are able to solve many of the challenges that come with global payroll management.
Here’s how a payroll consolidation platform can eliminate different global payroll pain points.
Before we can look at how to leverage consolidation to overcome the many global payroll challenges, we first have to understand what the different obstacles and complications are that businesses have to deal with when processing payroll for an international team. The main pain points are:
Global payroll compliance: Global payroll compliance is an incredibly complex topic that spans from complying with local tax laws and payroll regulations to meeting statutory reporting requirements to respecting deadlines for submitting withheld payroll taxes.
Multi-vendor management: Payroll is local, which is why many businesses work with multiple in-country partners (ICPs) to process their global payroll. While this allows them to leverage the local knowledge and expertise of the different providers, it also creates additional work for global payroll managers who then have to coordinate the activities of the different vendors and bring it all together.
Fragmented data and low transparency: A major problem of working with different ICPs is the fragmentation of the payroll data. The different pay elements, formats and file types make it hard to unify global data and gain a good overview of global payroll costs and other key metrics.
High level of manual intervention: Given that payroll data coming from different ICPs is so fragmented, this leads to a high level of manual intervention when it comes to putting it all together. In fact, it’s not rare for businesses to manually unify their global payroll data in excel sheets.
Tedious data collection for reporting and high error frequency: Having all these different data points and formats also makes it hard to pull together the necessary information to compose reliable and detailed payroll reports. Since the data collection process needs to happen manually, there is a high risk for errors, which can result in inaccurate reports and have a negative impact on the decision-making process.
Data security: In a fragmented global payroll landscape, data is typically transferred between different systems using emails and other communication channels that are not secure. Since payroll data is highly sensitive, this is a severe liability.
Lack of standardization: Given that payroll regulations and requirements vary from one country to the next, there will always be a certain level of variation in global payroll. But with different vendors and systems, multi-country payroll operations are often characterized by a severe lack of standardization, which makes it even harder to oversee the whole scope of the business’s global operations.
Low level of efficiency in payroll processes: Manual intervention, the lack of standardization and the multitude of payroll service providers and systems that are involved in the process ultimately lead to global payroll delivery and management being highly inefficient.
Given the multitude of challenges and issues they need to solve, many businesses have started looking for ready-made solutions for their global payroll pains. This is where payroll consolidation comes into play.
Consolidating payroll means centralizing one’s multi-country payroll operations by bringing the different payroll vendors and systems together in one centralized platform, with many added benefits that make multi-country payroll management easier and more efficient.
Payroll consolidation platforms like Lano come with built-in compliance features that alert global payroll managers of possible compliance issues and facilitate payroll data audits. Having a better overview of data and processes also contributes towards ensuring compliance, since it significantly reduces the likelihood of processing and reporting errors.
Businesses that consolidate their payroll in one platform can bring all their different payroll providers under one umbrella. If vendors are connected via one central system, communication and vendor management are largely simplified. Processes can be streamlined, which enhances operational oversight in payroll. Also, a centralized vendor management solution allows businesses to work with as many different ICPs as they want, which means that they can benefit from real local expertise in every single geography, which again enhances compliance.
One of the main reasons why businesses need a consolidated payroll is that it allows them to effortlessly unify their global payroll data. With the help of automation, data formats from different providers can be harmonized, pay elements standardized and all the data put together in a single source of truth where it can easily be accessed and used for reporting, payroll analytics, and more.
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Manually pulling together data for global payroll reports not only takes a lot of time, but it is also prone to error. What’s more, reports that have to be composed without the help of analytics tools are typically short of details and are never one hundred percent up to date. A consolidated payroll leverages payroll analytics to produce accurate, real-time reports that combine high-level insights with detailed insights into specific geographies, employee populations, and more. The result is a better understanding of the business’s global payroll cash flow.
A payroll consolidation platform uses payroll automation to reduce the need for human intervention in global payroll management to a bare minimum. Parts of the payroll management process that can be automated include data input collection for payroll, payroll reporting, payroll calculations audit and data transfers—to name but a few. Automation ultimately not only increases the overall process efficiency, but also reduces the likelihood of errors throughout the different stages of processing payroll.
Given that cyber crime is on the rise, payroll security has become a top priority for businesses of all sizes. Using a payroll consolidation platform ensures that all data transfers to and from different payroll vendors and their systems are secured and that the consolidated data is stored and accessed via a secure cloud environment.
Businesses can leverage payroll consolidation to simplify payroll management across multiple geographies and solve many of the pain points they experience when running a global payroll without a centralized solution. But there are many more challenges international organizations have to overcome on their way to optimized global operations. Some of them directly linked to payroll, others related to the broader field of managing a globally distributed team.
Lano’s Payroll Consolidation Platform enables businesses to unify their global payroll infrastructure, standardize and automate processes and data, and get access to detailed reporting and insights into their global payroll expenses. What’s more, our consolidated payroll platform for global teams comes with additional services and solutions, including:
Combined Employer of Record solution for hiring talent in 170+ countries
Embedded payment solution in the form of our Lano Wallet with which you can pay your global team in 28 different currencies across 170+ countries
Access to global network of experienced payroll partners covering 170+ countries
Contractor management capabilities (including invoice payments)
Leading SLAs to ensure outstanding global payroll performance
Fast implementation process which means you can have your global payroll up and running in less than a month
Lano API for integrating existing workforce management tools and systems for seamless global workflows
Lano Marketplace that features a range of available integrations, additional services and benefits for global businesses
Want to find out more? Don’t hesitate to book a demo with one of our experts
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