Facing the Challenge of International Payroll for SMEs

23 February 2015

An SME can go from being a local business to an international one surprisingly quickly. One or two international contracts can spread a company's footprint across global borders almost overnight. This can catch many SMEs off guard. Company owners that never contemplated operating a global business suddenly have to manage a workforce in multiple countries.

An SME can go from being a local business to an international one surprisingly quickly. One or two international contracts can spread a company's footprint across global borders almost overnight. This can catch many SMEs off guard. Company owners that never contemplated operating a global business suddenly have to manage a workforce in multiple countries.

Such a situation brings numerous challenges one of which is handling an international payroll. There are many scenarios for which a business may find it more prudent to outsource to global payroll consolidation specialists.
Here we look at a some of those scenarios along with some of the benefits global payroll consolidation can have, particularly for SMEs.

 

Remote Workers

 

There are many situations where a single employee works from a remote location for the benefit of the business. For example, should a valued employee wish to return home, a company may decide to retain them and have them work remotely via the internet. Alternatively, where a key supply market is based abroad a company may want to have a trusted employee at the point of purchase, overseeing acquisitions.

Whatever the reason, once this remote worker is on the other side of an international border complications are likely to arise regarding the payment of their salary. Satisfying foreign employment requirements and taxes can put a large burden on any company. SMEs in particular will want to optimise the value they gain from that remote worker.

 

Satellite Office

 

A small set up of just one or two employees, even if they are only working part time, can be extremely valuable managing local sales or services in a foreign market. The benefit of local knowledge or simply a physical point of contact for clients and partners can make a big difference.

However, as with a single remote worker, the cost of additional foreign payroll or accounting services can greatly diminish the value gained from that satellite office

 

Travelling Employee

 

Often small and medium businesses find that their most lucrative markets are further from home than they expected. Sales staff find themselves spending more and more time abroad until eventually they are effectively working full time in a different country.

Again this can create difficulties in terms of adhering to local work, pay and tax regulations. Finding a way to optimise the return on sales expenditure is vital, particularly where those margins have the potential to disappear rapidly.

 

Consolidating Global Payroll

 

 

Single Point

 

Rather than managing separate accountants or payroll services for each of the countries a business operates in, global payroll consolidation provides a single comprehensive solution.

 

Lower Operational Costs

 

As with any form of outsourcing, global payroll consolidation is more cost effective than managing payroll internally.

 

Optimal Compliance

 

Dealing with domestic tax codes is difficult enough. Navigating the unfamiliar tax codes of other countries can be fraught with risk. Outsourcing to a global consolidation expert ensures optimal compliance with foreign tax regulation.