Payroll Continuity Plan – How to Manage Global Payroll Under any Circumstances
The?COVID 19 crisis ?has taught many lessons about our business process. One important lesson has been about the challenges of?running a global payroll .
Over the past few days, companies have told us about being caught in scenarios like these:
The companies facing these scenarios all have one thing in common – they all use a standard, manual payroll. As they and many other companies across the globe scramble to meet their payroll obligations amid severe disruptions,?it is increasingly clear: just as?ERP and CRM has moved from paper and Excel to SaaS-based solutions, payroll must make the same?advance.
Companies across the globe?are?unveiling?hastily-constructed?contingency plans. These measures are?bringing?the limits of manual payroll into clear focus.?Companies need more than emergency measures. They need modern,?cutting edge?technology?that will work under any emergency.
Switching to a sustainable, automated process would allow?companies?to continue to function at times of disruption, disaster, or crisis.
Let the current situation serve as a wake-up call for the need to modernize payroll, once and for all.
Limits of Manual Payroll??
In a manual process, people not technology are at the heart of the operation.
Those people – the payroll manager or local payroll partner – may be sick or otherwise unavailable. In most companies, a small number of people (and sometimes just one) are responsible for the manual data process of gathering all of the payroll reports, calculating the tax withholding, adding the benefits and perks, and generating a payslip.
In a global payroll, relying on a specific set of people to be?available at each location is a recipe for?failure.?The unavailability of?a single?individual could bring the entire payroll operation to a screeching halt.?When companies are already running on contingency levels, manual payroll becomes a major liability.
Technology?in these times is an asset. An automated payroll platform?is equipped to?process multiple streams of data?and?make payments across borders ?in the local currency.?The platform is not tied to specific people but can be operated by anyone.
Payroll data may be lost or out of reach
A company with?a global payroll?will often?outsource?payroll to a local third-party provider.?The local?provider, not the company,?then?collects and stores the?essential?payroll?information?–?bank details, tax documents, benefit plans, the employee’s gender and number of children, address, vacation days accrued, and other relevant details.
In a crisis, this could prove disastrous.?If the company has to conduct an emergency payroll internally, it will not have access to the crucial payroll documents and data.
Even?if a company decides to store the documents on its own,?if it is using a manual payroll system, those documents will still be vulnerable at times of crisis.?Computers could be damaged and spreadsheet?files lost.
Data must be stored in the cloud,?If the people responsible for keeping it are unavailable, the data will still be safe and accessible.
It is unrealistic?to expect a person to swoop in on short notice and save the day??
With the amount of data needed for a global payroll, believing that anyone could possibly step in on short notice is an illusion. To process even one single payroll, this mythic figure would have to?collect and process
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That’s just?one?regular payroll.?A global payroll is at least three times more?complex and?time consuming than a regular payroll.?The reports would be in different languages, reporting styles, even different software.??Expense reports would be backed by receipts in the local language?and virtually impossible to audit.?The tax laws would require real expertise for compliance.
In other?words, it is simply unrealistic to believe someone can be brought in at the last minute.?A global payroll has too many moving parts. Automation is the only way to cut through the?jungle of data and ensure the workforce is paid correctly and on time.
Payroll history is essential
Taxes, social security payments, and?many mandatory benefits?run according to a yearly timeline.?A payroll manager?cannot?calculate them?compliantly without access to the?historical record?for each employee.?Those records, however, are stored by the third-party payroll?provider, not the company.?Without?payroll history, payroll will not be accurate.
A manual system relies on files, in some cases, physical, paper files, to maintain its historical record. An automated system keeps it all as a matter of course and any information can be called up in a matter of?seconds.
A manual process never shows the big picture
Every local payroll processor uses its own workflow completely independent of?all the others. A CEO or CFO never see the full picture of all workforce spending.
This can be a major problem in taking contingency measures, as many companies are doing in the COVID-19 crisis. Many are looking for ways to slash money from the budget, but are not sure what they are spending in total workforce costs.?Without being able to see all of the data in one view, the CEO will not be able to make smart decisions.
With payroll consolidation, which brings all global payroll information together into a single view,?real time business intelligence? allows senior management to see all workforce-related costs instantly. Decisions are made with full, reliable information, with none of the guess work and uncertainty that is typical of a manual system.
Costs stay high because of time and effort?expended
When companies go into crisis mode, the first thing they do is look for ways to reduce spending. With a manual payroll, costs will stay high because of all the time and effort needed to get it done. With a global payroll, that’s even more true.
A company looking to make easy cuts in the face of unplanned and unpredictable circumstances should start with automating the functions that are easily replaced with technology. When times call for the leanest possible operation, automating payroll allows the company to save while also improving its functionality.
Papaya Global has the Automation Platform for the Modern Age
Papaya Global has the technology solution?that would?allow?a company to withstand a crisis, and to function at a higher level at any time. With companies facing so many challenges across every business vertical, the last thing they need is to worry about how they are going to meet their payroll obligations.
Papaya offers a total workforce management solution supporting all types of global workers (payroll,?EoR, and contractors) in over 100 countries. The automated, cloud-based SaaS platform provides an end-to-end solution, from?onboarding ?to on-going management and cross-border payments.
Automation has many advantages beyond data collection – it saves staff time, eliminates human errors, and ensures legal compliance across the globe. It also brings together information from many sources into a single dashboard, which serves as the database for the BI.
Papaya’s?automated platform ensures payroll compliance, provides benefit management, and ensure data privacy in compliance with GDPR.?All payroll data is stored in the cloud and transferred through Papaya’s secure channels.
Contact us ?for a strategic consultation.?Don’t be caught off guard?for the next global crisis. Be prepared with Papaya Global.