Bring precision to your international employee cost accounting

13 September 2020 | International Tax

Bring precision to your international employee cost accounting

Richard McBride

How do the costs associated with your international employees get recorded in your books? Can you be absolutely sure that all costs have been accounted for correctly and in the right place?

With so many costs to manage, from disparate sources and different locations, recording and managing them accurately can be challenging to say the least. Many organisations end up bucketing everything together. As a result, widely differing line items like salaries, assignment allowances, travel expenses, relocation costs, accommodation costs and so on are posted to the same general ledger account, creating a lack of clarity as to what the account actually represents.

Unsurprisingly, this makes tax liabilities horribly complicated to determine. In the absence of a well-organised accounting process, costs are accounted for using a ‘one size fits all’ approach which then makes it tricky to work back and identify the taxable and non-taxable elements. It also swallows up a lot of time and resources.

What’s more, recharging of costs from the home to host location or vice-versa – not to mention the use of different accounting approaches in different countries – only adds to the complexity. If this all sounds pretty stressful, it can be easily avoided by putting a globally standardised accounting structure for your international employment costs in place.

Certino delivers on this. We work with you to create this structure. Then, our comprehensive, automated accounting solution determines which costs should be allocated to each entity, cost centre and general ledger account. It then provides you with reports or interface files to create one definitive, reliable accounting and recharging process for use across the globe.

So, you’ll always know where you stand regarding international employee costs – and you’ll save a considerable amount of time and money in the process.

Certino is here to discuss your international tax challenges and help you optimse your shadow payroll, so please do get in touch if you’d like to discuss any of the points above.

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