5 Common African Payroll Mistakes You Can Avoid by Outsourcing
- Last updated: October 16, 2024
Running a multinational is no easy feat, as you may well know. Between product development, sales, customer service, expanding the business, and ensuring the smooth day-to-day running of the company across multiple countries, directors and managers have their hands full and their work cut out for them.
Now, to this already overbooked schedule, add the many complexities of international payroll – and you will find a recipe for disaster, non-compliance nightmares, and damaged employer reputation. As it is, domestic payroll can already be full of surprises. When brought to the international level, these complexities and risks are multiplied. Before arriving at such a critical stage, watch out for the following signs to know whether you’ve reached a turning point and need external help:
1.You are not fully compliant with the law
2.You manage multiple payroll processes and partners for multiple countries
Adopting multiple payroll processes is a mistake many multinational companies make. Along with these multiple processes, the company’s many international entities each have their own Human Resource Information System (HRIS), which further complicates matters, brings up costs, and even endangers data quality. Centralised payroll systems are therefore crucial to efficient international payroll – and it’s often best to outsource such a task to dedicated professionals, rather than handle it in-house.
Now, if your company has already gone past this phase and has partnered with an international payroll service provider, you may find that your troubles are, unfortunately, not over yet. Companies that have multiple service providers for multiple countries are highly likely to have issues keeping up with the many service providers whose help they have enlisted. The solution would be to choose one payroll outsourcing solution instead of multiple regional ones. In this way, you will have a single point of contact, uniform processes across the African continent, and the service provider will require relatively minimal input from your side.
3.You are making currency exchange mistakes
Payroll teams often calculate salary using both, a set rate for the work done and a fluctuating amount of hours worked. In addition to this, payroll personnel have to frequently take into account overtime pay, leave benefits, tax rates, and withholdings. These set rates and variable hours often set up already overwhelmed payroll personnel for calculation mistakes.
Additionally, employers with a distributed workforce must deal with several currencies for each nation as well as a fluctuating exchange rate from day to day. From there on, it’s all too easy for payroll teams to incorrectly estimate pay, even with the correct data at hand.
4.Your data management may be compromised
It takes time to compile payroll data locally, and more often than not, the data is out of sync with other similar systems within the company. As a result, manually-processed data is often incomplete or out of date by the time it is available for analysis.
To remedy this issue, it’s best to enlist the help of a transparent and compliant African payroll service provider. The latter can offer real-time reporting and provide an efficient payroll administration system to both employers and employees.
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5.You are unable to ensure employee data protection
Employee data deserves the highest level of security your company can offer. Not protecting this data properly could be damaging to your employees, in turn hurting your company’s reputation. Beyond that, lack of data protection is a serious offense all across the world, and your company will likely be sanctioned, if found guilty of such an offense.
Setting up data protection protocols is a complex operation that requires both, advanced hardware and software. It may not be cost-effective to invest in such technologies unless your company is sizable and can offset the cost. This is why most companies opt for a payroll outsourcing solution, as the service provider already has the necessary hardware and software.
Why choose a payroll outsourcing solution?
Cost-efficiency
As mentioned previously, it can be costly to opt for in-house payroll processing when you have a multinational company that must collect and process data in a uniform manner all across Africa. The cost of hardware, software, and training make it hard for companies to justify the expense. At a fraction of the cost, payroll outsourcing firms can take on the task and be operational immediately.
Focus on core business
Managing payroll for a distributed workforce, as you may have seen, is time-consuming and labourious. Your company should be able to dedicate itself fully to its growth without being hindered by such tasks as payroll, especially when it can easily be outsourced. Besides, opting for a professional African payroll service will help eliminate payroll mistakes.
Compliance
Compliance is key when it comes to payroll. One small mistake or an oversight can be costly and worse, can damage your company’s reputation – something which is truly priceless and crucial for doing business internationally.
Africa HR Solutions – your trusted partner for guaranteed compliance
Africa HR Solutions assists many companies across Africa with their payroll needs. Our presence in over 45 African countries ensures uniform payroll processing for multinationals that wish to further expand to Africa.
Get in touch with one of our experts now to see how Africa HR Solutions can help your company with its payroll needs.
