FINANCE
International expenses
Changes in the global business landscape are bringing fresh challenges for HR and finance managers, who must grapple with paying employee expenses across different countries. Nat Davison, partner at specialist money exchange broker Frontierpay, shares his tips for ensuring the process goes smoothly.
on a two-year assignment, and has arrived at his new home with his family in tow. His new job is lined up, the kids are enrolled at the local
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school, and they have a beautiful house to live in during their time overseas. However, Nick is calling because things haven’t gone
according to plan. Upon arrival, he’s found that he can’t enter his house because the deposit and the first month’s rent haven’t been paid. Come Monday morning, he’ll find that the kids’ school fees haven’t been paid either. You start to wonder what could have gone wrong. Has the
payment been delayed, or maybe even rejected, by the bank? Has an unexpected change in the exchange rate meant that the funds sent aren’t sufficient to cover the expense? Either could be entirely possible, and, with global mobility
on the rise, situations such as this could increase as well. The world is constantly becoming more connected, and countries
magine that you, as your company’s HR manager, have received a call from Nick, a member of your team, who has just arrived in Chile. Nick has been sent from the UK
management What could go wrong?
are emerging for the first time as players on the international business stage. This is, of course, hugely positive from the perspective of business growth and the increased potential for a company to become a global player. However, this change in the business landscape is also
creating a host of new challenges for HR and finance managers, who have not only to complete payroll but also to pay employee expenses across numerous different countries and in a range of different currencies.
Can we ‘expense’ that? It’s important to clarify what, exactly, we mean by international expenses before considering where complications can arise. Much like those for staff based in a company’s home country, international expenses are separate from wages and are to cover costs that employees have incurred through their work. Where expenses for international employees most commonly
differ is that, while we might expect local staff to ‘expense’ a train journey or a client lunch, an employee who is moving overseas will need assistance with paying the more significant costs, such as renting a new home and paying for utilities. These payments are often made by the business direct to
a landlord or utilities provider, rather than by reimbursing the employee. It’s therefore easy to see how complications can arise. Not
only do HR and financial managers have to pay larger, more important expenses, they also have to keep up to date with changing local payment requirements and the ever-present fact that we can’t predict which way the exchange rate will move. Let’s take a look at where, exactly, the process has scope
to cause problems.
16 | Re:locate | Summer 2017
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