Why Manual Payroll is a Big Risk in Global Expansion
The mission of payroll is simple and straightforward – pay every member of your workforce correctly and on time, every payroll cycle. When it comes to global payroll, the mission is the same, but with complexity that makes it many times more difficult.
The process is time consuming and prone to error. Inaccurate payroll can damage your company’s reputation, alienate your workforce, and even lead to fines if labor laws are violated in countries overseas.
Adding new countries means adding more laws to navigate, and a host of other complexities. You are likely to have a new language, different salary and benefit expectations, and additional currencies to handle. Payroll managers have to reconcile numerous data streams in different styles, formats, and languages.
More specifically, payroll calculations rely on multiple data points and sources. To manage even one single payroll, the payroll manager needs to collect and process:
The payroll manager then must apply the correct rates of tax and social security withholdings for that particular person (based on gender, age, family status, etc…) and for that location.
The reports could arrive in all different formats. Expense reports will be backed by receipts in the local language and virtually impossible to audit. Each country has its own tax and labor regulations and governments have increased the liability on companies to comply with ever-stricter regulation on social benefits. Payroll managers have reporting deadlines to meet to avoid legal repercussions.
Repeating this process for dozens of employees in multiple countries manually is untenable. The task can only be accomplished on time and without errors if the process is automated.
Simplifying Global Payroll
While most payroll departments still remain tied to their manual legacy payroll practices, today’s business environment offers opportunities and risks that can only be addressed with state-of-the-art technology, most prominently global payroll automation.
Automated payroll software drastically reduces the time and resources allocated to processing employee information, taxes, salaries and other information. It removes human error, resulting in a perfect payroll run, month after month. It dramatically reduces legal risks such as court judgments, penalties, and potential employee litigation.
An advanced payroll automation system integrates easily with other workforce management tools companies are already using. Tools for tracking Time and Attendance and Paid Time Off already contain essential payroll data, so an integrated system replaces the need to enter data more than once – saving time and reducing errors.
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Information on salaries or performance with detailed and accurate histories are available at your fingertips, with no manual processing.
Automated Payroll Means Accuracy
The centrality of accuracy in payroll cannot be understated. Employees want accurate pay, employers want accurate pay, and governments want accurate taxes paid. Inaccuracies dramatically raise the costs of running a payroll operation. According to the American Payroll Association (APA), mistakes coming from the manual processing of Time and Attendances account for?1%- 7% ?of payroll costs.
Automated payroll processing means less human interference which equates to higher levels of accuracy. Computing income taxes and other deductions can be stressful, time-consuming and confusing, leading to payroll errors. A good payroll solution will automate all computations and always ensures accuracy and adherence to compliance.
But automation does more than reduce the chances for errors. It also ensures data accuracy more directly. An automated system “sees” all the data that passes through it and ensures that the line items are correct. If there is missing data, the system will let the payroll manager know at the earliest point possible, so that reports never go out with incomplete information.
With automation, it is also significantly easier to spot any discrepancies between the actual and expected payment amounts. If tax rates for a particular country are outdated or wrong, it will show up in the review process, not after the payments have been made.
Automation simplifies global payroll. Its contribution to data accuracy, however, may ultimately prove to be one of its biggest advantages.
Expand Fearlessly, Your Global Payroll is Covered
Papaya Global can help your company navigate the challenges of global expansion. Papaya’s automated platform provides a total workforce solution, covering all types of employees and contractors. It streamlines all employee data into one view, and provides custom Business Intelligence reports to help companies find the information they need about their payroll spending.
An automated global payroll system like Papaya’s will free up your time and resources so that your company can focus on achieving your business goals, safe in the knowledge that any potentially damaging payroll distractions or errors will not affect your global expansion plans.
You find the top talent globally. Global payroll automation does the rest.