As an enterprise, managing smaller companies, each with their own unique operations, can bring multiple benefits. However, handling the financial records of so many diverse subsidiaries also brings challenges. Forecasting with inputs from each branch and consolidating financial statements increases the risks of costly mistakes.
That’s why a new trend has emerged, offering powerful advantages to help your teams — especially your accounting organization — streamline financial operations.
The IEC Group’s 2024 report on the Employer of Record (EOR) industry — which named G-P as the market leader — highlighted an increase in the number of enterprises merging their small subsidiaries under an EOR, touching on key benefits, including:
- Unified payroll processing.
- Local tax compliance.
- Streamlined annual reporting.
- Reduced local accounting efforts.
- Decreased audit risks.
- Operational efficiency.
- Timely financial reporting.
Let’s dive into how an EOR can help you make the most of these benefits, using G-P’s industry-leading experience.
1. Unified payroll processing
Managing payroll for multiple subsidiaries can be challenging. Think about it. Every location has different labor, tax, and reporting laws. There could be multiple currencies too, not to mention fluctuations in exchange rates.
The IEC Group noted that unified payroll processing is a major benefit because the EOR can handle payroll for all employees across different countries. This means your accounting team only has to deal with one invoice.
To see this in action, G-P supported global peptide contract development and manufacturing organization AmbioPharm fund payroll in different currencies. Teresa Cheek, Director of HR, IT, and Administration at AmbioPharm, spoke to how the partnership streamlined key aspects of the company’s growth journey: “G-P’s straightforward payroll management adds a layer of simplicity to handling global operations. Putting my trust in G-P means navigating the international business landscape with confidence and ease.”
2. Local tax compliance
When managing the finances of small subsidiaries, your accounting team will need to deal with various tax authorities, each with its own forms, filing deadlines, and payment schedules. On top of that, your team has to stay alert because these tax laws change frequently.
The IEC Group pointed out that an EOR guarantees compliance with local tax laws, including filing employment taxes and mandatory reports. This means your accounting teams no longer have to master the details of each jurisdiction’s tax system.
When G-P partnered with Aurora Expeditions, an award-winning expedition company, we took over the time-consuming process of understanding different countries’ taxation rules. Mick Mag, their Chief Financial Officer, highlighted how the compliance process has transformed since the partnership: “The time and effort involved in locating and employing team members in new jurisdictions has gone from being a complex burden to being a simple and efficient process.”
3. Streamlined annual reporting
Accounting teams can find it challenging to manage annual reporting across multiple subsidiaries. Subsidiaries might operate under different business models, making it difficult to apply the same accounting policies.
However, partnering with an EOR can achieve streamlined annual reporting. As The IEC Group explained, an EOR can help prepare annual reports by organizing financial data in a standardized way. This makes it easier to consolidate global financial reports on time.
Just look at our premium EOR package, G-P Meridian Prime™, which offers advanced reporting and analytics capabilities. It provides detailed expense reports, which are key for recording and maintaining accurate financial data, as well as access to best-in-class system integrations — all backed by the largest team of legal and HR experts for guidance at every step of your growth.
4. Reduced local accounting efforts
Each country has its own unique rules and regulations, making local accounting even more complex for enterprises. Not to mention there are other challenges like adhering to different regulatory environments, tax laws, currencies, and exchange rates.
In their report, The IEC Group emphasized how an EOR takes charge of HR and payroll tasks, reducing the workload for local accounting teams, who regularly need to handle these processes amid location-specific regulatory landscapes.
G-P streamlines these processes with technology integrations like our partnership with Sage Intacct. Pairing its cloud-based financial management system with the capabilities of the G-P platform creates one connected tech stack that reduces manual data entry, mitigates risk of errors, and other time-consuming concerns your accounting team would otherwise need to prioritize.
5. Decreased audit risks
Each subsidiary has to go through local audits with different rules. This puts financial reporting quality at risk, as not all of an enterprise’s smaller subsidiaries always have the same accounting expertise.
Partnering with an EOR provider means you can rely on industry experts to help you stay on the right side of the law. The IEC Group highlighted that using an EOR for accurate and compliant payroll and tax filings reduces the risk of financial mistakes that trigger audits.
Cybersecurity company SonicWall cited G-P’s expertise in minimizing risk as a key benefit when they chose us as their EOR provider. “The legalities of doing business in some of these countries — that’s where we’ve seen a lot of benefits [from G-P],” said Bryce Ashcraft, Former Vice President of Global HR at SonicWall.
6. Operational efficiency
Your teams should make sure that all financial data is accurate and consistent across all branches. However, if you have smaller accounting teams managing your subsidiaries, it can be challenging to gather data from each branch and put it all together for reporting and analysis.
Teaming up with an EOR will make things easier. According to The IEC Group, an EOR simplifies operations by eliminating the need to create and manage accounting systems in multiple countries. This would allow your accounting team to focus on core financial strategies rather than international compliance.
To achieve this specific benefit, G-P recommends our all-in-one, simplified G-P Meridian Core™ solution. Through payroll, tax, and compliance management, G-P Meridian Core helps companies achieve greater operational efficiency without managing multiple accounting systems.
7. Timely financial reporting
Enterprises face a huge headache meeting reporting deadlines across multiple subsidiaries. Consolidating a subsidiary with an EOR can improve your financial reporting speed.
The IEC Group explained that EORs can give you regular financial reports on employee costs, which can help your company meet financial reporting deadlines, without the pressure of coordinating reports from different subsidiaries.
Finance platform OneStream can vouch for this through their experience partnering with G-P. “All our invoices live in one place and the costs are easy to understand. G-P helped us eliminate confusion, discrepancies, and the need to manage multiple sources of information,” stated Martha Angle, Vice President of Culture, Diversity, and People at OneStream.
7 Benefits of Consolidating with an EOR
- Unified payroll processing
- Local tax compliance
- Streamlined annual reporting
- Reduced local accounting efforts
- Decreased audit risks
- Operational efficiency
- Timely financial reporting
How G-P can help
At G-P, our team has over a decade of experience working with large enterprises in 180+ countries. Our G-P Meridian Core™ EOR package will help your accounting team streamline the financial challenges that come with managing multiple small subsidiaries. One of the most easy-to-use growth packages ever, G-P Meridian Core guarantees global and local compliance alongside simple, self-guided workflows that no one can beat.
Download The IEC Global EOR study today to discover more about why G-P and our products are the leading choice to help your enterprise achieve its global growth goals.
