6 THINGS TO CONSIDER WHEN CHOOSING A GLOBAL PAYROLL PROVIDER
Are you considering converting to a new global payroll provider, but hesitant to make a change? You may be concerned about missing payroll periods or data errors during the transition, but it doesn’t have to be chaotic.
The key to a successful payroll conversion is a streamlined conversion process that meets the unique needs of your company while minimizing the amount of work required to get started. When you’re ready to make the switch, here are six things to consider when choosing a payroll provider.
1. TIMING OF A PAYROLL CONVERSION
Deciding when to implement a new payroll solution is important. If you are considering a mid-year conversion, Quarter 2 is a good time to start the process. Another option is to convert at the end of the year. The ideal time to begin a year-end conversion is October so it doesn’t conflict with any year-end processing you need to handle.
No matter which time of year you choose, a streamlined implementation process will ensure a smooth transition. Part of this process is working with an experienced and knowledgeable sales consultant who understands your needs and requirements to recommend the best solution. Given the complexity of workforce solutions and the multitude of capabilities that will impact your company, a good payroll provider should have a sales team that is involved every step of the way.
2. DATA CONVERSION
When considering a conversion, it’s important to also look at whether the payroll system is unified with core HR and attendance. When payroll, core HR, and time tracking data are stored in a centralized database, this provides many benefits, including:
Greater user flexibility
Reduced payroll errors
Eliminated duplicate data entry
Decreased labor costs
Increased visibility into company trends and metrics
Look for a global provider who assigns a dedicated implementation manager with the experience to translate the differences in the systems and suggest improvements that will increase productivity, reduce the potential for errors, and drive down costs.
Whether your company has employee garnishments, non-cash fringe benefits, or complex vacation policies, you want to look for a solution that will meet your unique requirements and scale to your company’s structure.
3. DATA INTEGRATION CAPABILITIES
Many companies have existing business investments for benefits, such as general ledger software and retirement packages. The ability to integrate these existing systems with an online payroll system is a huge benefit as all of the data is accurate and up-to-date. Other benefits include:
Eliminated duplicate data entry
Consider global providers that have an established portfolio of integrations with the most popular business applications and vendors.
4. PAYROLL TAX COMPLIANCE MANAGEMENT
With payroll tax compliance rules constantly changing, it’s crucial to utilize a global payroll provider with a tax compliance department that will help manage these updates. Once conversion is complete, a tax compliance team should update your payroll tax tables each year, and help with year-end processing.
A good global payroll provider should have a tax compliance team that consists of experts who will review your existing data to check for any potential payroll tax errors. The tax compliance team should also update payroll tax tables each year, handle tax filings and payments, and help you with year-end processing.
5. DATA CONVERSION
One of the most important steps of the conversion process is migrating company data out of your old system and into the new system accurately. To ensure your data will be accurate, make sure the following tasks are performed:
Data Conversion: Year-to-date history is entered into the new payroll solution.
Payroll Assessment: A payroll compliance assessment is performed to reconcile data history.
Validate Accuracy: Parallel, or side-by-side payrolls are run prior to the first live payroll submission to confirm data and tax settings are correct.
Look for global providers who assign you an implementation point of contact who will handle your data conversion process. They should perform all of the above tasks in addition to importing payroll and employee data from previous years.
6. Questions to Ask an International Payroll Partner
Before committing to a global payroll provider, companies should carefully vet multiple providers to determine the best fit for their unique business needs to ensure a prosperous partnership.
Six questions that every company needs to ask before selecting a payroll partner:
Will the payroll partner guarantee certain performance and implementation targets, and offer a discount if those are missed?
Companies need to define clear, agreed-upon goals in order to help shape the relationship with their payroll partner and ensure a positive experience going forward.
Are all services in-house or do they contract with global providers?
If a global payroll partner uses third-party local providers, it is important to know how they are managed and whether or not it will affect their relationship with the international payroll provider. This will help companies understand how the relationships will work going forward.
What is the size, composition, and investment in their global and local compliance team?
Companies need to ask where a team is located, how many experts they have in a particular market, and what they do to ensure their payroll services are compliant with all local regulations. This will help determine whether a global payroll provider has the necessary expertise to help companies avoid compliance issues down the road.
What technology platform do they use and how will it integrate?
It is important for companies to understand whether or not their current payroll systems will integrate with the platform used by their payroll provider. Clarifying this will help ensure a smooth and seamless implementation of a company’s international payroll services.
What is the payroll partner’s experience with expatriate payroll and tax compliance?
Compliance requirements for expatriates are different in every country and it is important for companies to know the requirements in their target countries. For example, in Singapore, income taxes and social security contribution rates for expatriates and locals are different. Before selecting a partner, companies need to make sure the payroll company understands the unique requirements for each type of employee they plan to hire in a country.
What ongoing support will the service provide to a company and its employees?
Do they offer online documentation and troubleshooting? Do companies have a dedicated representative on the account that they can call in an emergency? Do employees come to their employer with questions or do they go to the payroll service? Companies need to anticipate how the long-term relationship with a global payroll provider will work and how their employees will interact with and benefit from the service.