Ask Addi P.: How Do I Make Managing International Workforce Year-End Reports Easier?

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Dear Addi P.,

Year-end is upon us and the paperwork is piling up. With offices and staff around the world, my team is struggling to complete personnel and payroll tasks on time, account for compliance concerns and ensure employee privacy. Got any tips for managing international workforce year-end issues?


— Drowning in Documents

Dear Drowning in Documents,

Thanks for reaching out! While multi-national corporations (MNCs) enjoy the benefits of expanded markets, there is a tradeoff: increased complexity. When you go global, it's not all smooth sailing — access to emerging markets comes with the need to manage international workforces and ensure that year-end reporting meets both local and international standards.

So let's dive in. Here's a look at four top paperwork challenges for MNCs and how your team can defeat the document deluge.

Challenge #1: Everybody is Global

Multinational corporations don't just face competition from other MNCs — existing providers in expansion areas often corner market segments because they're local, familiar and reliable. As a result of the rapid uptake of commoditized cloud computing and easy international shipping, everybody now has a global presence, whether they want one or not.

For MNCs operating satellite offices and hiring local staff, this creates a challenge: If employee records and year-end reconciliations aren't finished on-time and in full, local partners may look elsewhere for suppliers. And the bigger your footprint is, the harder the fall may be if you can't collect, correlate and complete reports at scale.

Solving the paradox of global paperwork means taking the edge off with automation. The sheer amount of data entry (and potential for errors) that can come with managing international workforce reporting demands automated tools capable of capturing and vetting data across multiple sources and then centralizing that data so HR can use it easily.

To put it simply: Don't do more work than you have to. Adopt automation and stay ahead of the competition.

Challenge #2: Everything is Changing

International accounting and reporting standards aren't uniform, and they aren't static. In the United States, the U.S. Securities and Exchange Commission (SEC) has adopted a set of Generally Accepted Accounting Principles (GAAP) to help streamline year-end financial reporting. But just north of the border, Canadian companies are required to use International Financial Reporting Standards (IFRS) which don't always align with GAAP.

For example, the last in, first out (LIFO) method of inventory costing allowed under GAAP won't fly with IFRS. If you're operating in India, the Indian Accounting Standard (IND AS) applies, and it uses different standards for tax reporting. If you're opening a branch in Singapore, the Singapore Financial Reporting Standards (SFRS) are the benchmark.

For HR and payroll teams, this is a problem in the making, as ideal reports in one country may miss the mark everywhere else. One option is to spend time and money on staff whose sole job is to ensure year-end records match local expectations. As standards evolve and businesses expand, however, this can quickly shift from "time-consuming" to "impossible."

Here, cloud-based solutions can bridge the gap, as region-specific report localization and continual cloud updates can help ensure that reporting standards don't get ahead of HR staff.

Challenge #3: Everyone is Waiting

Your organization's international success depends on your staff. Without the right mix of local and outsourced talent, even your greatest efforts may not be enough to achieve your organization's international goals.

You need to ensure that year-end payroll paperwork is accurate, completed on-time and sent to staff ASAP, or they'll find somewhere else to work. Tax documents are a great example: In the United States, personal taxes must be filed by April 15 for the tax year that ended with the preceding calendar year, but this isn't a global standard. In Canada, the deadline is April 30. In China, it's March 31. Japan's is March 15, and in the U.K., the deadline is Jan. 31 for anyone filing a paper return.

Managing international workforce requirements means ensuring that all tax paperwork is completed by the deadline and sent out to staff. Deploying digital portals that make it easy for staff to access their tax documents on-demand can streamline this process significantly. It's also a good idea to leverage compliance tools that provide reminders about upcoming tax deadlines, especially if you're dealing with expats who must pay both U.S. and international taxes.

Challenge #4: Everywhere is Different

Digital privacy standards vary significantly from country to country. A 2019 study shows 132 countries have privacy laws covering public and private sector operations. Perhaps the most well-known is the General Data Protection Regulation (GDPR), which comed with stringent requirements (such as the right to be forgotten for any European Union (EU)-based individuals). Brazil's General Data Protection Law (GDPL), which will go into full force in August 2020, is influenced by GDPR and carries substantial fines for any violations. New laws in Bahrain, meanwhile, have established a Data Protection Authority that is responsible for overseeing any Bahrain-based data processing, even if MNCs are headquartered outside the country.

Closer to home, regulations such as California's Consumer Privacy Act (CCPA), effective January 1, 2020, now provide enhanced consumer privacy rights.

Accounting for continually evolving privacy laws worldwide would be an impossible task for any HR department, but it's critical that you ensure your year-end reports don't accidentally violate national or international standards. Integrated compliance tools can help ensure that reports meet both local and international data expectations and allow your team to complete critical tasks without accidentally risking corporate revenue.

Paperwork challenges remain the bane of managing an international workforce. My advice is don't do it all yourself. Get help from automated, integrated tools that can help reduce error rates, recognize accounting differences, deliver taxes on time and prioritize digital privacy.

Take care,

Addi P.

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