Is international money movement costing your company money? With global expansion, comes the need to manage funds across borders, and to ensure it is done efficiently, securely, and without costing you more than it should. A quick assessment of your current funding environment could identify any areas of weakness and potentially the need for a Treasury Services partner.
To begin an assessment, and before developing a money management strategy, there are four areas to consider regarding your company’s international payments:
1. Where is your money?
What you are looking to understand here is the strength of the company’s individual country revenues and if the local office can support funding their payroll. If so, this may warrant having the local payroll team make salary and tax payments through a local bank. On the flip side, if you are centralizing your payroll, you can also benefit from economies of scale and controls by centralizing your funding through a corporate (global) office or in a regional center. In this scenario, the company could select an outsourcing provider for payroll that also have expertise in the local tax structures, thus minimizing the risk of non-compliance for the company.
2. What is allowed in each of your country locations?
It cannot be stressed enough that there are many complexities around funding global payroll. One of the most common complexities is that different countries have different requirements. For example, some countries, such as Mexico, require payments for withholding taxes to be paid from a local “in-country” bank account, and for some countries, a direct deposit (or wire transfer) can take a few days, whereas in the US, it can be literally, minutes.
Below are just a few additional examples of country-specific currency requirements:
- Argentina—Employees must receive remuneration in Argentina pesos
- Brazil—Both employees and foreign employees must be paid in Brazilian reals
- Canada—Employers are allowed to make payments to foreign employees in foreign currencies
- China—Does not have a requirement regarding foreign employees for payment of wages
If these requirements are not followed, it could end up costing your company money, time, and effort due to non-compliance. Seeking the assistance of Treasury professionals with knowledge of these regulations can mitigate risks for your company and save you money in the long run.
3. How many employees do you have in each location?
Employee population(s) plays an important role in global money management. A company that has only 10 employees in a certain country will have different needs than the company that has 200 employees in each of 10 countries, for example. Additionally, knowing your expansion plans across your country landscape can factor into the best way to manage cross-border payments. Having the expertise of a global payroll and treasury provider can help your company make the most efficient, and cost-effective solution.
4. How and when will you manage foreign exchange?
Managing the ups and downs of foreign exchange rates is often one of the biggest challenges for companies as they expand globally. Knowing the right time to purchase and finding ways to safeguard the effects of money movement become imperative. A proactive approach is needed to understand the company’s budget, exposures to local currencies, how they could impact the company on a monthly, quarterly, or annual basis, and to ensure that the company has adequate funds for each pay cycle so that employees will always be paid on time. Companies should consider a third-party money management expert to help determine the best blend of solutions for their organization.
This is where iiPay comes in!
What to do now? Whether your organization is large or small, a sound global payroll strategy should be built on recognized best practices for money movement. iiPay’s Treasury Services can help you with all the complexities to form those best practices to ensure you are getting the most out of your money.
iiPay has the expertise and experience to ensure your money movement strategy considers:
Compliance – iiPay has a dedicated team of treasury management professionals with vast experience in dealing with statutory regulations and legislative requirements. The team is dedicated to achieving accurate and timely disbursements based on sound money movement practices and in adherence with country legislation.
Security – iiPay ensures the highest level of security protocols including GDPR and SOC 1 to ensure the safest and most efficient process for money movement.
Reporting – Full visibility and easy access to your account and transactions, including secure and real time access to your money movement activity.
Efficiency – Our end to end processes prove to be accurate and timely, again and again. Our treasury services are currently running at a 99.99% on time success rate.
The Strategic Advantage of using iiPay for your Global Payroll Money Movement
iiPay’s Treasury Services will simplify the payment processes for your local payroll teams and reduce the burden on internal resources. As a seasoned partner who is proficient in formulating effective money movement strategies for our clients, we are there to walk you through how this process can work best for you and your team. Allowing iiPay professionals to handle your payroll disbursements not only helps to eliminate risk but it also gives time back to our clients to perform high value activities that are specific to their roles and the company’s goals.
Our Centralized Funding strategy consolidates our clients’ often complex and multinational funding requirements into one single currency payment (either EUR, USD or GBP). Put simply, we take away the worry of ensuring that adequate local currency is held by each entity or location, as well as the burden of making payments at a local level. In collaboration with our payment partner, we are often able to offer superior Foreign Exchange (FX) rates to those typically offered by banks – consistently achieving cost-savings across your locations. We will complete all disbursements (including salary and third-party statutory payments) on behalf of your company wherever we are able to do so according to local legislation.
At iiPay, we understand that money movement is an important part of payroll services and there is no ‘one size fits all’ solution. In addition to our Centralized Funding Strategy, we also offer money management through local funding and bank files. Your money movement strategic plan can start as a hybrid solution that can work for very few or multiple locations around the globe. In doing so, you can mitigate the risk of a crisis restructure and move forward with a seasoned partner who is adept in supporting your organization. Let us help you to create and plan an optimized Treasury solution tailored to meet your specific requirements.
Through our innovative technology and our service-driven approach to partnership, we can meet your needs around global payroll, including treasury functions to ensure your employees and third-party institutions are paid on time. Is your treasury service, fully compliant, secure, and efficient, with reporting that allows you the visibility you need? Let iiPay partner with you to create a plan for success.