As the world waits on COVID-19 vaccines, business leaders are managing through a global depression with both the US and European economies continuing to threaten the Asian export market. This is the type of economic downturn that traditionally results in retrenching employees as an immediate cost-cutting measure.

However, the global and personal impact of the pandemic has driven a people-first approach to managing through this unprecedented economic downturn; every business has customers and stakeholders watching how they respond to market challenges to balance people and profit.

Leaders ready to do things differently can look to sustainable cost-cutting strategies to guide your organisation through change with reduced risk:

1. Smart management of working capital
2. Employee stock option plans
3. Outsourcing payroll or improving processes
4. Outsourcing finance, tax and accounting services
5. Leverage industry grants and economic stimulus

By prioritising what drives value for your organisation in the long-term, sustainable cost-cutting strategies focus on positioning the company to survive now and to thrive through an economic recovery.

Cash flow is critical in a crisis, and minimising investment in working capital — what we spend to get the job done and keep business running — is critical.

2020 has put the focus back on operational efficiencies — and effective working capital management. Growth and development may be temporarily on the backburner, but this is the time to get the business-critical functions of your organisation right. Containing costs to minimise reliance on lenders will position your business to recover strongly as economic conditions bounce back from an unexpected 2020.

A renewed interest in working capital demands a critical assessment of the entire sales pipeline; inventory levels, distribution points, and product viability are all on the table.

Smart leaders are looking at strategies, including:

• proactive invoicing — offering customer incentives like early payment discounts
• cash management — paying suppliers when they’re due, not before
• inventory — lowering stock thresholds to reduce risk, but maintain agreed customer service levels
• reducing overheads by outsourcing backend services.

Next steps: Assess your working capital costs and financial forecasts to confirm what you can bring inhouse and which backend services are smarter to outsource.

Outsourcing backend services like payroll has a poor reputation as being the inevitable result of retrenchment, or a sign of instability. However, payroll processes are crucial to managing through an economic downturn; smooth payroll processes drive employee satisfaction, and it’s likely your HR department is busy by managing people issues in a pandemic.

There two ways to outsource payroll to streamline operations:

• completely outsourcing the payroll function and services to an external provider
• using a cloud-based SaaS HR management system (“HRMS”) — freeing up HR from administrative tasks by empowering automatic and self-service tasks.

The approach can also unlock unexpected benefits, and expose the significant opportunity cost of not outsourcing key functions; boosting visibility, streamlining internal processes, and staying compliant across multi-country payroll and tax conditions.

Each model can benefit their corporate objectives while managing costs, cross border functionality, and personal data privacy of employees.

Next steps: Check if payroll outsourcing or SAAS for payroll management suits your business needs.

In an economic downturn, every organisation focuses on the very core of the business; the what and the why. It’s never been more important to have experts aligning your financial processes and procedures with your organisational goals. Your organisation can seek financial help with everything from bookkeeping to redundancy strategies to ensure the business runs smoothly while internal staff focus on business survival and generating revenue.

By choosing a financial services partner equipped to manage your operational and strategic finances and accounting, businesses bring external expertise and new perspectives on long-term accounting and tax planning.
Support for tax planning may include:

• location planning for tax offset maximisation
• streamlining cross-border transactions to simplify complex deals
• minimising and deferring payments while staying fully compliant
• strategic planning to leverage falling asset values.

An additional unexpected benefit of external support across accounting, tax and financial reporting is the establishment of effective data reporting, analysis and forecasting. This data helps to inform planning, working capital decisions, and support for your enterprise to apply for eligible economic grants and stimulus packages and ensure the governance is in place to stay compliant with funding conditions.

Next steps: Put all your financial operations on the table for expert review. Focus internal skills on long-term planning and get external support for tax, accounting and reporting.

If you don’t have cash on hand but want to reward and retain employees look at an Employee Stock Options Plans (“ESOPs”).
As companies like Slack and Atlassian lead the way in remote-first workforces, competition for skilled employees demands a different way of approaching the employee experience. Employee equity plans have been popular during the COVID-19 pandemic as companies look for a different approach to boost employee engagement, maintain productivity, and keep intellectual property.

Create a purpose-built plan to fit your organisation and employee needs and create a sense of ownership to keep the best and brightest employed in the long-term. Your new stock plan — or updates to your current plan — should:

• keep liquidity by creating long-term incentives to replace short-term cash bonus or salary increase expectations.
• reward high performance and employees who increase operational efficiency during an economic downturn.
• use performance metrics relevant to your organisation — look at total shareholder returns (“TSR”), client retention, and return on equity (“ROE”) and adapt goals to conditions.
• drive growth by incentivising staff towards a common business goal.

Next steps: Look for an external provider who can manage your Hong Kong-based or global ESOP and keep the workforce focused on revenue-generating initiatives.

Since the unprecedented challenges of COVID-19, Asian markets have seen a new range of government, industry grants and other economic stimulus packages.

If your organisation operates across borders or is open to funding to expand operations, you may be eligible for funding support.

Support from government or industry grants demands stringent corporate governance; you may need a guide to accessing, implementing and leveraging new opportunities across borders.

Next steps: Get expert help to find Hong Kong support for enterprise and cross-border funding opportunities, apply for funding, and to stay compliant across jurisdictions.

Cost-cutting strategies to manage through an economic downturn look different today to the Global Financial Crisis or the dot.com crash; leaders must balance short-term needs with long-term business survival.

It is no longer enough to reduce headcounts, freeze salaries, and scramble to maintain productivity. Smart organisations are taking a new approach to old problems: keeping employees committed with stock options over pay rises, looking for market and industry support, and getting smarter about the benefits of outsourcing.

The right outsourcing partnerships are key; who you choose to support your business can define your organisation and your leadership. Look for providers that support your workforce with administrative and financial expertise that drives business recovery.

Talk to BoardRoom about support for sustainable cost-cutting strategies.

• Why you should be considering an employee equity plan
• What is an employee stock option plan

Managing your accounts in-house does not necessarily translate to cost-savings or better efficiency. Maintaining an experienced full-time accountant, or two, could set you back thousands of dollars a month. And in the event where your accountants may later choose to advance their careers elsewhere, you would have to embark on a resource-intensive hiring process that would cost you precious time and money.

However, should you choose to engage a professional accounting firm, you virtually eliminate these concerns. You pay a monthly service fee that gives you access to the expertise of an entire team of accountants who are proficient in various areas of accounting – from tax management to bookkeeping. You will never have to worry about varying hiring cost, induction/training programs, and employee turnover!

One key benefit of accounting, when done correctly, is its ability to clarify the status of your company’s financial health. Having a clear picture of your company’s finances helps you to make informed decisions when growing your business. It allows you to determine the feasibility of any business plan such as expansion and hiring. It prevents any counterproductive decisions that might threaten or delay your business growth by months or even years.

Credible accounting firms can help you to paint a clear picture of your company’s cash flow and seasonality by critically analysing your receivables and collections. Additionally, should you engage a regional accounting firm, their advisory services and market-analyst will be made available to you. Through them, you can effectively assess your company’s performance and make strategic decisions that will aid in your business success.

Time is a valuable and finite resource, so it matters what we do with it. As your company grows, more time will be needed to organise paperwork and navigate newly applicable regulatory complexities. From matters such as payroll, tax statements to Profit and Loss statements, a single oversight could result in a compliance infringement that may lead to a hefty financial penalty.

These risks and time cost can be mitigated through a professional accounting firm that is experienced in tax laws and procedures. Often a team of experts will be quick to flag any irregularities and ensure that your accounting records remain immaculate. In short, they will keep your company from any financial pitfalls and allow you to enjoy peace of mind.

Navigating Hong Kong’s complex regulations can pose a series of challenges that may result in an oversight of applicable tax breaks and exemptions. Ensure that you are maximising your savings and deductions by engaging professional accountants who are familiar with Hong Kong’s regulations, and can adequately qualify your business for the relevant tax rebates as well as expense deductions.

For companies that conduct business overseas, a professional team of accountants can even prevent issues such as double taxation due to their in-depth understanding of international tax treaties.

Accounting records can be messy. A decade of records would quickly amount to hundreds of files and thousands of pages. Naturally, this makes the retrieval of data and reference a nightmare. Fortunately, as we transit into a technological age, professional accounting services are offering to store your business accounting records in a digital format on secure platforms with advanced software. These platforms often come with additional modules such as payroll and claims submission. They store their data electronically, together with the accounting records, in a centralised and secure location for maximum confidentiality. Digitising your accounting records also brings about ease of access. Regardless of place and time, you can retrieve records and reports in real-time from anywhere in the world!

BoardRoom is a regional accounting firm in Hong Kong that caters to corporations and fast-growing SMEs. Our expertise extends from tax accounting to managing statutory compliance reporting for companies across Asia-Pacific. With BoardRoom’s extensive accounting solutions, you can regain precious resources and refocus them on what matters – growing your business.

Contact us today or learn more about our accounting solutions here.

A general trend of companies that tend to adopt this service are organisations that exhibit the following characteristics:

• Non-complex Pay Runs – Standard payroll calculations for companies mostly consisting of full-time monthly salaried staff or casual labour typically find outsourcing payroll to be immensely beneficial as costs tend to be lower than having a full time equivalent (“FTE”).
• Expanding Businesses – For businesses like technology start-ups or food & beverage chains where growth can be exponential, good Outsourcing Payroll providers can keep up with dynamic and fast changes in staff numbers.
• Multi-Jurisdiction – These companies benefit from outsourced payroll as they can redirect the resources of the HR team into other business generating activities when they spend lesser time ensuring that they are familiar with the different laws across several countries/states.
• Compliance Worries – Companies that operate in markets with complex labour laws and regulations such as Malaysia and China might have a lack of access to expert knowledge necessary for them to operate with a peace of mind. Outsourcing payroll to a reliable vendor can help lift the burden of worrying about fines or potential lawsuits resulting from a misunderstanding of the complicated payroll requirements.

Of course, this is not an exhaustive list and there are exceptions. As every business is unique, an excellent Outsourcing Service provider should have the ability to customise and advise you on the best solution to meet your needs.

There is no one size fits all solution when it comes to Payroll, however, we often see companies that exhibit the following characteristics benefiting most from the adoption of an all-in-one HRMS SaaS solution.

• Start-ups – A HRMS SaaS model can provide a no-frills solution to process payroll for growing companies. An all-in-one HRMS SaaS solution can also offer efficiencies for busy companies, automating and connecting many of the key modules needed to administer payroll such as leave & claims. Modern HRMS SaaS solutions will also cater to the mobile nature of our world and offer a mobile app and the ability to access the system anywhere, anytime.
• Companies using Offline Administration Methods – A HRMS SaaS model can help alleviate administrative burden for HR teams running manual payroll processing, especially ensuring data accuracy and calculations as the system will do this automatically.
• Companies with Complex Legacy Systems – Usually companies seek a HRMS SaaS solution when they have a legacy system that is unable to retrieve real-time data efficiently. Modern HRMS SaaS models provide real-time reporting capabilities, ensuring that businesses can leave behind clunky legacy systems and streamline to a more efficient mode of payroll reporting.
• Businesses with Complex Payroll Processes – The adaptability of a HRMS SaaS software ensures that even the most complicated and complex pay runs can obtain a customised solution, should they select the appropriate vendor.

There is a wealth of options for processing payroll, the correct solution will boil down to what is most suitable for your business. Your companies’ size, growth strategies, compliance requirements and operating model will all influence the path you choose. Whatever your choice, always ensure that your solutions are in line with your objectives.

Our regional presence with offices in Singapore, Malaysia, Hong Kong, China and Australia and experience in dealing with various regional and international clients makes us one of the trusted Payroll Outsourcing partners in the APAC area. Contact our Payroll experts to see which solution best suits your business.

Payroll is a largely administrative function that requires a high level of attention to detail. In short, it is a time-consuming business requirement, regardless of your company be it 50 employees or 5,000, processing payroll is a constant that can quickly drain HR resources.

When you outsource your payroll processing you allow your HR teams to focus on core business activities that drive performance and growth, fundamentally saving the business time.

In addition to this, a professional payroll outsourcing provider will have had a variety of experience processing payroll for companies of all shapes and sizes. This is a direct benefit to your business because it means that irrespective of how you grow or where you grow to, your pay runs will never be in jeopardy and you won’t waste time hiring and training a new payroll administrator each time you experience growth.

There is no one size fits all solution for running payroll. Each business has a unique set of requirements that a professional payroll outsourcing firm will not only cater to but recommend best practices processes and systems. Multi-country payroll processing, especially across Asia Pacific can be a daunting task to manage in-house. However, a payroll outsourcing firm will have a multitude of experience across a wide range of industries and will conduct multi-country payroll processing daily, meaning your business will benefit from their years of experience.

 Comprehensive payroll reporting can make a real difference to an organisation, from visibility over annual leave trends for resource planning or assessing overtime reports, payroll reporting can play an important role in business planning. A good payroll outsourcing provider will not only have the platform in place that caters to comprehensive reporting they will also provide regular reporting and insights for your business.

Personal data protection has never been more important than when in the context of processing payroll. The personal data stored for payroll is highly sensitive and requires a significant investment, not just in infrastructure but also in staff training to ensure companies remain in compliance with local personal data protection laws.

By engaging a credible payroll outsourcing company, the investment and risk associated with compliance failure by your internal teams is mitigated. The payroll outsourcing company will have extensive systems and best practice processes in place to ensure there is no breach.

Running payroll, especially across Asia, brings with it a multitude of local country statutory regulations and standards that need to be met. This goes beyond accurate computations of gross to net salary and moves into the specific statutory deductions required in the country you’re operating.

The intricacies of these reporting standards need to be timely and mistake-free to avoid potential time-consuming audits and penalties. A professional payroll outsourcing company will ensure you always remain a compliant employer.

Wherever there is time savings, there is typically cost savings and outsourcing payroll is no exception. It is a common misconception that payroll outsourcing is more expensive than having an in-house team. The truth is, it really depends on your business needs, however, as a general rule you can expect payroll outsourcing to be a cost-efficient solution if you have standard pay runs.

If you require a more complex solution, payroll outsourcing could still be the answer. By outsourcing your payroll, you have a dedicated team at your fingertips who has an array of experience across a diverse range of business needs and challenges. You do not need to worry about hiring and training staff to manage your complex needs.

A key benefit of outsourcing is the access to a team of highly trained professionals. All of which are dedicated to answering any questions you have and pre-empting and providing proactive solutions to any potential issues that may arise.

In addition to this, many payroll outsourcing companies provide complementary services. BoardRoom is a good example of one such company their team across Hong Kong, China, Singapore, Malaysia and Australia offering services such as Corporate Secretarial, Accounting and Taxation.

This is a benefit to your business as you can tap into a team of experts that cater to all your back-end business requirements.

At Boardroom, we are experts in helping companies, from corporations to fast-growing SMEs, with their payroll, allowing them to focus on what matters – growth and profitability.

From local payroll services handling to managing substantial payroll obligations for bigger companies spread across Asia-Pacific, we help companies comply with local statutory regulations while ensuring their most valuable asset, the employees, are paid on time.

Contact us today and empower your organisation with greater freedom through our payroll solutions.

Or you can also learn more about our payroll solutions here.