10 Reasons why global businesses need a consolidated payroll

Global payroll is incredibly complex and challenging. There are multiple providers to manage, various data streams to unify and operations in several countries to oversee. Supervising a multitude of payroll providers and processes can quickly become overwhelming, often resulting in payroll errors that either trigger costly compliance issues or put the business at risk of losing some of its employees.

Unfortunately, organizations often only recognize the need to centralize and unify their global payroll when things are already in a downward spiral. Ideally, however, multinationals should consolidate their global payroll before things get out of hand.

There are many reasons why global businesses should have a consolidated payroll, and organizations that start unifying their payroll infrastructure in time can leverage various advantages. Here is an overview of the different benefits of having a consolidated global payroll.

Consolidating payroll is closely intertwined with payroll automation. Payroll automation means minimizing the required human intervention in payroll processes through the use of technology. Since manual intervention always carries a high risk for errors, automating global payroll decreases the error frequency. This boosts the accuracy of the collected payroll data, reduces possible complications with regard to compliance, and generally means less work for the payroll team.

Without a consolidated payroll approach, payroll data comes into the central system in various different formats, showing different payroll components for each country and payroll provider. The only way to keep track of global payroll costs and key payroll metrics like the overall efficiency and accuracy of payroll is to invest valuable time into manually putting all the data together to gain a clear view of what is happening in payroll across geographies. With a consolidated global payroll, this time can be dedicated to more important business activities.

Improving the visibility and transparency of global payroll data leads to clearer, more concise reporting. This, in return, helps global businesses make well-informed business decisions that lead to greater business success. If the leadership team has access to accurate, real-time payroll data that offers consolidated insights into payroll operations on both the country and global level, important financial decisions can be taken data-driven instead of being based on speculation.

Unifying global payroll in one central system that automates data exchanges through a secure integration interface improves the overall payroll security. When using different payroll systems for each geography, data transfers usually happen through insecure channels such as back and forth emailing, which poses a high security risk for sensitive data.

Payroll automation reduces the need for human intervention in the payroll management process, which reduces labor costs needed for payroll. Also, the more payroll processes are automated, the higher the overall process efficiency and the less errors occur, which means that less resources must be spent on spotting and correcting errors. What’s more, having one central payroll management system is cheaper than operating with multiple systems.

Having a consolidated payroll for the entire global team enhances the employee experience on several levels. First of all, automated payroll processes reduce errors, which means that the risk for payment errors is lower compared to running a non-consolidated global payroll. Second, global payroll solutions usually offer a range of self-service functions for employees, which means that the latter can access their personal information and payroll-related documents more easily. Third, using a centralized global payroll system enables businesses to offer a standardized employee experience across all geographies.

Running a multi-country payroll typically involves managing a variety of different vendors. In fact, businesses relying on managed payroll services work with an average of six payroll providers and use around four different third-party payroll technologies for their global payroll. The multitude of payroll providers and technologies makes it hard for businesses to oversee their global operations and streamline processes on an international level. Having a consolidated global payroll leads to better operational oversight.

Better operational oversight of payroll not only increases efficiency and makes global payroll easier to handle. It also significantly reduces compliance risks. That’s because a global payroll platform allows businesses to work with a multitude of experienced in-country payroll partners (ICPs)—instead of having to rely on providers that cover a whole region but are less experienced. Also, managing all the in-country partners through one central platform makes communication easier, which means that crucial compliance-related questions can be addressed quicker.

Payroll consolidation happens through an advanced technology platform that connects different payroll services and payroll softwares. But global payroll solutions are not limited to connecting with different payroll technologies. Instead, they offer a wide range of integration possibilities which allows them to connect with a variety of workforce management systems, including HCM systems, HRIS, expense management tools and more. This further increases the efficiency of the business’s global operations.

Payroll is a crucial process that encompasses a variety of different aspects and is linked to a whole range of other business processes. A software platform that is aimed at unifying global payroll typically offers a range of additional functions and capabilities that come in handy, payments being one of them. Since paying international employees can be challenging, using a platform that offers different payment options for globally distributed teams is a good solution to make sure everyone gets paid accurately and on time.

Lano is the Payroll Consolidation Platform that allows you to unify your global payroll operations in 170+ countries. Standardize, centralize, and automate global payroll for all your entities, in-country partners and employment types through one single platform. 

Benefit from built-in compliance and payment options, gain deeper insights into your global workforce costs, and easily connect your HR and Finance software. Book a demo with our expert team to find out more about how to put global payroll on autopilot with Lano.