Every company may start out small, but that’s no reason to think small. Planning for a multinational company during the preliminary stages of your business, at least in part, can save you money in the long run. Payroll is often overlooked as both an area to save money and an area to bring value to your company. It is also one of the biggest sources of hidden costs when the system you rely on isn’t scalable.
Many smaller companies end up with a cobbled-together solution as they expand, adding local companies to take care of payroll in each country or region due to varying legal and tax compliance regulations. This works about as well as you think it does – which is to say, not very. Each of these local companies is going to have a different payroll program, and you are going to have to figure out how the pieces fit together when you pull all of this payroll data, and much of this process will be manual.
As you plan the direction of your company for the future, don’t leave Global Payroll behind. Just as it’s important to plan scalability into other areas of your business, it’s vital that your payroll system and team is prepared to scale with you. Think about how well your current payroll system will function in 5 years when you’ve expanded your business – if you don’t think it will keep up with you, now is the time to change.
Start Small, Plan Big
You may think that your company is too small to afford the technology that big businesses have. You’ll switch systems when you can afford to, just waiting for that $100,000 a year mark, or that $500,000 mark. The problem is, by that time your data has expanded, likely beyond the capabilities of your current system and there is now more to do to transfer that data to a new system, which can be a drain on your resources and more costly in the long-run. In fact, even for small companies, the cloud has allowed accessibility and affordability to these updated systems, and it’s time to think big for your company.
If you move to a scalable cloud-based system sooner rather than later, it will last you throughout your years as a business from operating out of your garage to becoming a multinational corporation. Through our experience, we have seen many companies, small and large, recognize the following benefits by transitioning to an agile up-to-date cloud-based system:
Centralization
As mentioned, many smaller companies don’t want to switch to a new system when they scale up, so they end up adding local payroll companies to cover the work as they expand. Switching to a cloud-based centralized system allows your data to flow smoother and cuts down on the overall workload. All of the company’s global payroll information is in one place and available at a glance. Without manual intervention, your raw data across all countries is readily available for detailed reporting and analytics.
Efficiency
Consider this: a system built for small companies can’t handle the workload for a large company, but the system that can handle a large workload can also handle a small amount. Start with an efficient system that can scale up. You won’t need to worry about losing that efficiency to multiple systems, switching systems or other related pitfalls. Beginning with a scalable efficient system will also save you time by reducing the likelihood of errors that occur from an overworked team and overloaded system.
Data Security
With increasing scrutiny on protecting personally identifiable information (PII) through regulations such as GDPR, it is essential for all companies, big or small, to ensure the privacy of their data. Utilizing up-to-date cloud technology that builds in these requirements will help your company avoid breaches that can be costly to your business, both financially and from a business reputation perspective.
Legal Compliance
You should always be prepared for a tax audit or similar inquiry into your legal compliance; one of the side benefits of a centralized system is the ability to ensure compliance with various laws and regulations. Your legal experts can track compliance easily through a centralized payroll system and provide those reports in the instance of an audit.
Reporting
Payroll is one of the largest expenses in any company. A centralized system helps you get more accurate reports on your true payroll spend around the globe. instead of having to gather a dozen separate reports from multiple systems or providers, you can have one reliable report that will help you make smarter decisions regarding other business departments. Consolidated real-time reports give immediate insight into your payroll when that information is most helpful.
Long Term Benefits
Start your business with your eyes on the future. You’ll benefit more in the long run by investing in a payroll system that can scale with you as your business grows. The hidden costs of limping along with a cobbled-together inefficient payroll model can cripple your business growth in our fast-paced world. The centralization, efficiency, security, legal compliance, and reporting capabilities available through having one large-scale payroll system will add long-term value to your company. If your company is looking toward global expansion, there’s no better time than now to transition to updated cloud-based technology, especially as it relates to your global payroll. Better data, detailed insights, and improved decision-making add up to business success. Check out iiPay’s global payroll technology and service to see how we can help you scale your business for future success.
