Payroll SaaS: Why A Regional Payroll Provider Is Better
16 Apr 2021
Managing payroll in Singapore is relatively less complex as compared to other countries. However, it is not without its inherent challenges given Singapore’s strict and ever-changing financial regulations. While Singapore-based companies may find it difficult to keep track of the evolving regulatory and tax environment when computing payroll for employees, companies with operations across Asia Pacific are likely to have a more difficult time.
When an organisation has operations in multiple countries, it is often the internal HR team that struggles. Payroll regulations, particularly those in the emerging countries, often change quickly and without any proper communication. The lack of updated information may inadvertently cause HR administrators to calculate payroll incorrectly and result in issues of non-compliance.
Under such circumstances, it is advisable for companies operating in multiple countries to use a payroll system. While individual HR employees may keep themselves updated with ongoing regulatory changes, when HR employees leave the organisation, payroll regulatory knowledge of a particular market is effectively lost. Using a payroll system that is automatically updated with the latest statutory changes can help ensure compliance.
Regional payroll processing
When it comes to managing payroll processing for global operations, the majority of organizations surveyed (52%) typically pay employees in one country by processing payroll from a single central location. A smaller proportion of organizations (16%) indicate that they currently operate on a regional payroll-processing model.
However, organizations are recognizing the need and advantages of having a single payroll vendor to handle all their payroll needs globally. Results from Ernst & Young’s 2017 Global Payroll Survey indicated that more than half of organizations surveyed believe that there is a single vendor who can handle all their payroll needs globally, of which 43% find it very important to achieve global payroll delivery through a single vendor.
With an increasing number of organizations looking to reap the benefits of what a global payroll provider can offer, the international payroll providers are gradually beginning to deliver. Here are some reasons why a regional payroll provider can bring about significant benefits when considering for a regional payroll software-as-a-service (SaaS) provider.
One major benefit of a regional payroll SaaS provider is the cost advantages that it brings about. For organizations that have operations in multiple countries, engaging a separate payroll vendor in each location means paying separate package fees for individual locations. Engaging a single payroll vendor to manage the organization’s regional payroll allows for bundling of packages, which helps to lower the overall vendor fees.
Consolidation of employee data
Mobility of employees is particularly common for countries with regional presence. This is where engagement of a regional payroll provider comes in handy. Most regional payroll providers have a centralized HRIS database to store and manage employees’ data across multiple entities. Should an employee move to another entity and needs to be on a different payroll, this facilitates easy retrieval of the employees’ data for payroll processing.
Standardized payroll processing
A single regional payroll SaaS platform helps to streamline payroll processes and ensure that there is a standardized payroll processing workflow across the various operating locations. One major issue that organizations struggle with is varying payroll packages that each country location purchases with the payroll provider. This creates unnecessary complexities given that the payroll team has to deal with multiple deadlines or requests from different payroll providers across the region.
Similarly, regional payroll providers also represent a way for the organization to quickly acclimatize to the business landscape by removing the need to constantly familiarize with changing compliance regulations. This helps to minimize the chances of non-compliance.
Given the sensitivity of payroll data, organization will need to review the vendor’s security protocols to ensure that they are comfortable with their security infrastructure. Using a single payroll vendor minimizes the need to conduct multiple security reviews for each payroll vendor as the terms and agreements would have already been finalized previously.
With the complex tax and labour regulations across Asia Pacific, it might be advisable for organizations who are looking for payroll solutions to engage a regional payroll SaaS vendor that simplifies payroll management.
Over the years, payroll management has taken on an expanded functionality, offering client organizations a wide array of services while ensuring efficient management of payroll. Concurrently, payroll vendors have invested heavily in maintaining compliance and securing confidentiality of clients’ payroll data. Today, advanced cloud-based software enable companies to store payroll data securely while allowing them to generate reports according to requirements from tax agencies and banks across multiple countries.
Payroll SaaS reduces the overall costs and drives operational efficiency. Payroll processes are also streamlined across multiple locations, minimizing any payroll discrepancies. This frees up more time and resources, which can be spent on critical business functions.