Large or small, all businesses have to ensure their payroll, invoices, tax bills and data inputs are in compliance with relevant laws. There are several complicated procedures involved in taxation and compliance regulations that evolve continuously. This complicates payroll procedures, leading to more effort and more data requirements, including relevant information regarding your employees and their employment contracts, wages, benefits, overtime, yearly leave and other employee demographics. Luckily, it is possible to address these payroll-related challenges by using payroll software. Let’s take a close look at the payroll challenges and ways to eliminate them.
Compliance. Running an organization is never a cakewalk. Compliance is one of the toughest challenges in payroll processing because regulations, labor laws and statutory compliance requirements can vary greatly even just across the US, not to mention around the world. To make matters worse, regulations change from time to time. Failure to keep up can lead to many penalties and fines for your business.
Meanwhile, organizations that are growing rapidly often must make quickfire recruitment decisions, which can lead to compliance falling through the cracks. For example, say your business finds a once-in-a-lifetime sales opportunity that requires you to enter a new international market quickly. There is little time at hand to create a fully vetted expansion strategy, and as a result, you employ independent contractors overseas. As sales numbers grow, the nature of work starts to expand and move to unlawful territory — i.e., those workers should be classified as employees. Sometimes, growing organizations are unable to employ people from new countries at all. In both cases, outsourcing candidates to an employer of record can be the way to mitigate risk. An EOR already established in your target market can ensure compliance as they provide payroll and HR management for local employees.
Technology. Technological advances such as being able to open a multi-currency account make payroll generation simpler. But streamlining processes doesn’t always mean that you will be accurate all the time. An effective payroll and taxation software system can alleviate your problems with taxation and payroll management. But be aware of the right technology needed for placing your trust.
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Flexibility and remote work. The pandemic led to many significant changes for businesses, including the need for more flexibility. For example, an organization might have modified its shift schedules, leading to frequent changes to payroll, leaves and other operations for coordination. With the world of business evolving every day, you might be required to reinvent your entire product line due to the changes in the market situation.
Then there’s the rise of remote work, which has led to many businesses having employees in far-flung locales. It means you have to coordinate schedules and also manage payroll across several locations. If you are using a manual payroll process, you are at a disadvantage, as it lacks sufficient flexibility. But if you can use an automated payroll management system, you will have the opportunity to overcome these challenges fairly easily.
Meanwhile, remote work rendered hard-copy sign-in forms and card readers ineffective for attendance management. Email processing can be chaotic. You will need a system that can automate remote attendance and manage performances, training and leave requests.
There are several factors growing businesses have to take into account while selecting a payment method for their business while paying remote employees, such as security, processing fees and transaction delivery period. The good news is that a wide range of payment alternatives are available. Some of the tools you can use for paying remote teams to include:
- Checks from the employer.
- Direct bank deposits.
- Using third-party payment gateways such as Venmo and PayPal.
- Using freelance work platforms such as Upwork.
The payroll and taxation industries are dynamic and are subject to continual changes and updates. Payroll processing is not a simple job that can be easily handled manually by one person without any hassles. Challenges in the process can impact the compliance structure and accuracy, which can result in penalties levied. To mitigate these risks, consider using payroll management software and an employer of record.