Before the COVID-19 global pandemic, many global businesses simply worked through the payment challenges they experienced; sticking to familiar manual processes instead of digitising to find efficiencies. However, once millions of workers became remote workers overnight, many global businesses had no choice but to embrace change and quickly act to find digital solutions.
As early as April 2020, 65 per cent of businesses had already begun (or were making plans) to move cheque payments to electronic formats, according to a survey by the Association of Financial Professionals. AFP also found that 38 per cent of businesses had already implemented changes to their internal cheque issuance procedures.
Although many companies may have been quick to move away from paper cheques, some processes like global payroll continue to face challenges making on-time payroll payments. A Canadian company, for example, struggles to make on-time payroll payments into various European countries. When their processes fail they have to enlist their treasury and accounting departments to correct the issue, which can involve an expensive amount of manpower.
Many global companies also still manage multiple bank accounts in different countries in order to get their payroll completed. These firms experience bank file failures on a monthly basis and have to maintain relationships with multiple banks and vendors to pay their workforce abroad.
So, why have these companies not addressed these issues? One of the main reasons it is hard to automate this process is due to many countries having different legislation around payroll payments and how they are completed. In addition, each bank has its own procedures. A lot of European countries are also seeking to improve their payment methods, making it hard for global companies to keep up with changing legislation.
This is, of course, only going to change even more as the UK’s transitional exit from the EU concludes at the end of 2020. It is possible that EU nationals will need to apply for work visas and permits to continue to work in the UK, and vice versa. Doing so would pass along further costs and overheads to employers who will have to sponsor the workers. For payroll managers, this may require learning new processes if they have not previously sponsored an employee in the UK. The separation of the UK from the EU might also require internal treasury departments to source additional bank accounts to be able to make payments into and out of the EU and UK separately.
Opening new bank accounts is a workaround for Brexit, but not a quick one. Opening new bank accounts in new countries can take months and usually requires an in-country manager or physical address as a point of contact.
There are long-term solutions in the market that will not only help countries navigate the payroll challenges of Brexit but also create a centralised system that addresses the perpetual pain points of global payroll like maintaining multiple bank accounts and legislation.
International payments provider TransferMate has a global payroll solution that tackles compliance challenges and delivers payroll on time through its integrated payments technology. Industry experts, including those from TransferMate, will present some smarter ways to pay international payroll during a Global Payroll Association webinar on October 29, 2020, at 15:00 GMT. Register here for free.
Before the COVID-19 global pandemic, many global businesses simply worked through the payment challenges they experienced; sticking to familiar manual processes instead of digitising to find efficiencies. However, once millions of workers became remote workers overnight, many global businesses had no choice but to embrace change and quickly act to find digital solutions.
As early as April 2020, 65 per cent of businesses had already begun (or were making plans) to move cheque payments to electronic formats, according to a survey by the Association of Financial Professionals. AFP also found that 38 per cent of businesses had already implemented changes to their internal cheque issuance procedures.
Although many companies may have been quick to move away from paper cheques, some processes like global payroll continue to face challenges making on-time payroll payments. A Canadian company, for example, struggles to make on-time payroll payments into various European countries. When their processes fail they have to enlist their treasury and accounting departments to correct the issue, which can involve an expensive amount of manpower.
Many global companies also still manage multiple bank accounts in different countries in order to get their payroll completed. These firms experience bank file failures on a monthly basis and have to maintain relationships with multiple banks and vendors to pay their workforce abroad.
So, why have these companies not addressed these issues? One of the main reasons it is hard to automate this process is due to many countries having different legislation around payroll payments and how they are completed. In addition, each bank has its own procedures. A lot of European countries are also seeking to improve their payment methods, making it hard for global companies to keep up with changing legislation.
This is, of course, only going to change even more as the UK’s transitional exit from the EU concludes at the end of 2020. It is possible that EU nationals will need to apply for work visas and permits to continue to work in the UK, and vice versa. Doing so would pass along further costs and overheads to employers who will have to sponsor the workers. For payroll managers, this may require learning new processes if they have not previously sponsored an employee in the UK. The separation of the UK from the EU might also require internal treasury departments to source additional bank accounts to be able to make payments into and out of the EU and UK separately.
Opening new bank accounts is a workaround for Brexit, but not a quick one. Opening new bank accounts in new countries can take months and usually requires an in-country manager or physical address as a point of contact.
There are long-term solutions in the market that will not only help countries navigate the payroll challenges of Brexit but also create a centralised system that addresses the perpetual pain points of global payroll like maintaining multiple bank accounts and legislation.
International payments provider TransferMate has a global payroll solution that tackles compliance challenges and delivers payroll on time through its integrated payments technology. Industry experts, including those from TransferMate, will present some smarter ways to pay international payroll during a Global Payroll Association webinar on October 29, 2020, at 15:00 GMT. Register here for free.