How to automate payroll for global teams with payroll consolidation

Running a multi-country payroll can be an operational nightmare. There are a myriad of processes to oversee and more than just a handful of service providers and systems to manage. And finally, all the data and information needs to be constantly updated, verified and processed to avoid errors and keep track of global payroll expenses.

An automated payroll set-up saves time, increases the overall accuracy of the payroll, leads to better compliance, and generally simplifies global payroll management. In short, there’s no doubt that multinational businesses have a lot to gain from automating their global payroll operations.

But how to automate payroll in a global payroll set-up? Which parts of the payroll process can be automated? And is it worth investing in a proper software solution to automate payroll?

An automated payroll system uses technology to carry out tasks that would otherwise require human intervention. It’s a software solution that enables businesses to automate several important parts of the payroll process, which reduces the error frequency, saves time and money, and makes the entire payroll process easier to handle. 

Moving towards automated payroll is especially interesting for organizations that have a multi-country payroll to manage. Automating crucial processes such as data consolidation, payroll reporting, and vendor management leads to better operational oversight and makes global payroll management a lot easier.

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What is payroll automation?

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The first question that usually comes up with regard to automated payroll is which payroll tasks and aspects can be carried out automatically. In order to automate payroll, businesses should focus on the following payroll processes:

• Input collection: collecting information on employee details, salary changes, onboarding and offboarding information (adding new employees and taking leavers off the payroll)

• Payment automation: payment information can be generated during payroll and then be sent to a connected payment option automatically

• Payroll reporting: consolidation and standardization of payroll data from different payroll providers to make it easily accessible for different business functions and enable detailed analyses through different tools and filter options

• Data transfers: automated data transfers between systems, providers and the global payroll platform through integration

• Payroll calculation through use of payroll software (or through payroll provider using payroll software)

• Automated audit of payroll calculations instead of manual validation of payroll results

There are three different stages of payroll processing, which are pre-payroll activities, the actual payroll process and post-payroll activities. Multinational organizations that want to automate payroll for their global teams need to keep these different stages in mind, since payroll automation spans across all three of them. Here is how to automate payroll across geographies.

Automating pre-payroll tasks: data collection and validation

Apart from creating a compliant payroll set-up in each geography and implementing a global payroll, the main pre-payroll task for preparing a multi-country payroll is collecting and validating the necessary data inputs before sending them to the respective in-country payroll partners (ICPs) for the actual payroll calculations.

The collection of the different sets of data needed for payroll can be automated by integrating the payroll system with the business’s HRIS systems. The next step is to enable the automated creation of summarized reports of the imported data, which the global payroll manager can then verify and approve.

Payroll processing

The actual payroll process is the part of payroll that is most commonly associated with automation. In a multi-country payroll set-up, the actual payroll calculations for each location are usually performed by local payroll providers who use payroll software for this purpose.

The real value of payroll automation for multinationals in the payroll processing step, however, lies in using technology for standardizing the data structures and formats of the payroll results provided by different payroll partners. This makes it easier to verify and validate the payroll results and use the data for reporting and analytics purposes (see next section).

It is further possible to leverage automation to replace the manual process of auditing payroll results by enabling an automatic audit of the delivered payroll results against the initial payroll data input.

Post-payroll

The validation of the payroll results is the final step before issuing the payments to the employees. The transition between these steps can also be automated. This can be achieved when the payroll files are automatically transferred to the chosen payment solution.

Another advantage of having standardized, consolidated payroll data is that it makes it easier to draw comparisons between different geographies and provides detailed insights into global payroll costs. With the help of payroll analytics, payroll reports for different locations, countries and employee types can be generated automatically.

Multinational organizations typically use a whole range of software tools to manage their international workforce and may therefore be reluctant to invest in a global payroll solution that would allow them to automate payroll for their global teams. The advantages of automated payroll are obvious and range from fewer payroll errors to time savings to cleaner reporting. But there are some additional reasons that make a case for a full-scope automated solution for global payroll.

First of all, multi-country payroll solutions come with built-in compliance features, which is crucial for ensuring global payroll compliance. Second, automated payroll solutions provide businesses with clean, transparent data and useful insights into their global payroll costs. Third, they give businesses more flexibility to make changes and adapt the set-up to their individual needs once the underlying platform infrastructure is up and running. This could include exchanging one in-country payroll partner for another or change to a different system from which to source the input data needed for payroll.

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Why invest in a global payroll solution?

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Lano’s Global Payroll Consolidation Platform allows you to standardize and automate your payroll operations across all geographies and locations. Unify your payroll infrastructure and manage payroll for all countries, entities and employee types in one central platform. 

Benefit from automated data transfers and standardized, clean data from all your payroll providers, and use our integrated payments solution to pay all your employees and contractors in their local currency with just one click. Book a demo with one of our experts to learn more about how Lano can help you automate payroll for your global teams.