Understandably, payroll is a sensitive topic involving highly confidential information, so it is essential that you do your homework to find a suitable outsourcing partner. Payroll involves sensitive financial information, not only of your company but your employees as well.
However, payroll outsourcing has a lot of benefits to give to companies. We all know that the time you have available to spend working on your business is such a precious commodity, so outsourcing the payroll function is likely to be an efficient use of your resources. You don’t have to worry about the nitty-gritty process of managing your employees’ pay and you have more time to focus on how to grow your business better and faster.
However, because payroll is a crucial back office task, you need to make sure that it is done on time and accurately. Here are some key points you need to consider when looking to outsource your payroll.
When outsourcing payroll, It isn’t wise to choose the cheapest so here are some questions to consider:
1. Is the service provider a one-man band and, if so, are back up resources in place?
Evaluate your needs and determine how many if you need a whole team to do the job or an accounting virtual assistant can do the job. It is advisable, however, to work with outsourcing agencies because they guarantee the quality of work and the reliability of the service. You don’t want your employees to be left waiting when payroll comes.
2. Is the service provider a recognised payroll provider and do they belong to a professional body?
Having a certification in the accounting and payroll field is a great way to determine whether an agency is legitimate. But this should not be your only consideration. You have to find out about the relevant experiences of the payroll team that will work for you, and the whole agency as a whole. This will help you understand the capability of your outsourcing partner.
3. Does the service provider undertake professional training?
Payroll is a boring department, but there are some changes now and then that business owners and payroll managers have to be aware of. Undertaking professional training keeps your team updated on the recent regulations and the new payroll systems being implemented.
4. How does the service provider keep up to date with legislation and do they regularly update their software to reflect this?
Get to know what payroll system your outsourcing partner is using and whether they are using the latest version. This will make sure that your payroll services are also accurate and updated.
5. Is the payroll data secure and can the provider accommodate historic data?
Payroll processing involves dealing with sensitive financial information of your company and your employees. Falling into the wrong hands can cause serious damage to your business. What security measures does your outsourcing partner implement to protect your data? How does the agency deal with a data breach? Talk with your outsourcing agency to determine their security protocols so you know what to do.
6. Is there a data backup recovery plan in place in the event of a disaster?
Data breaches happen, and so do accidents or disasters. Find out what the outsourcing agency’s emergency plan is when the unexpected happens. It can be a disaster if you lose all your data and there is no backup whatsoever.
7. Can the provider process the payroll hourly, weekly, fortnightly or monthly?
Adhering to the payroll schedule is one of the important factors of payroll processing. You don’t want your employees to be waiting for their payroll only to find out that it hasn’t been processed yet. Coordinate with your outsourcing payroll partner regarding the schedule of your payroll and make sure that they consider the time zone difference, if there is any. Regardless of whether your payroll is hourly, weekly, fortnightly, or monthly, your outsourcing partner should be able to cope up with your schedule.
8. Does the provider have the capability to accommodate your needs as your business grows?
You need to plan ahead. Your needs will change as your business grows, so you need to find an outsourcing partner that can keep up with your growing needs. This is one of the advantages of outsourcing. As your business scales up or down, outsourcing should be able to provide for your changing needs. You don’t have to worry about not having enough people or having too much staff for your current workload.
9. Are there processes in place to ensure that your payroll will be processed on time?
As mentioned earlier, schedule is very important in payroll processing. Find out how your outsourcing agency handles the process and what they do to prepare. This will give you an idea if they have the capability to deliver on time.
10. Does the service provider offer any added value services?
Outsourcing payroll is just of the tasks that you can outsource to third-party providers. But you can also outsource other tasks such as accounting, administrative tasks, and customer service. Choose an outsourcing partner that is able to provide you with a complete outsourcing package.
If you are reviewing your situation and need any other compelling reasons to consider going down the outsourcing route you might also consider some additional benefits such as:
- Reducing your operating costs
- Increased flexibility and responsiveness
- Access to the latest technology and dedicated payroll resources
- A confidential payroll environment
- Consistent delivery service
Outsourcing payroll functions does not only help you manage your resources wisely, but it also provides you the flexibility you need in these changing industry landscape. Outsourcing seems to be the most convenient way to keep with your payroll needs, but you need to do some extensive planning before jumping into this trend. Aside from considering which payroll tasks you should delegate, you also need to choose the best outsourcing agency out of all the thousands of options available. Make sure you choose a professional, reliable, and experienced outsourcing partner who is capable of delivering quality output on time.