What You Need To Consider When Outsourcing Your Payroll

Traditionally, small medium businesses have opted to handle all payroll processing manually in house to keep operating costs low. This means that their finance departments are in charge of tabulating all working hours for employees within a specific pay period and calculating the respective financial compensation sums. When including compensation for overtime hours as well as accounting for deductibles such as an employee’s CPF contribution and corporate insurance, a complex and tedious process emerges. As such, small businesses are increasingly opting to engage external payroll outsourcing services to help cope with the payroll challenge. In this article, we cover important factors that business owners need to take into consideration when choosing a payroll outsourcing provider. 

Firstly, expertise should be confidently demonstrated. The potential partner needs to be knowledgeable about the latest payroll regulations and applicable local laws. A bonus point would be past experience in providing payroll processing services to your industry or similar pay structures in the past. This will reduce the learning curve that the partner has to go through when first studying your account. For example, in general payroll solutions for industries such as food & beverage or hospitality tend to have additional complexities in terms of rostering, overtime pay and timesheet management. 

Secondly, the technology used by the partner for automated solutions should be up to date. Rather than using solely rudimentary technology coupled with tedious manual work, your partner should have advance technologically based solutions that allow for easy tracking and understanding by you, the client. Additionally, modern payroll processing platforms are built to offer employee self-service functions such as rostering and attendance. This further reduces the workload of your finance department.

Thirdly, change management should be considered. Whether your organisation is small or large, change has to be carefully managed to ensure employee buy-in and successful implementation of any new procedures. As such, you should pay attention and question your potential payroll partner on their proposed plan for managing change. This is even more crucial if you plan on having an integrated payroll and human resource solution as the learning curve for your staff becomes even steeper.

Lastly, transparent fees are a must when you pick a partner to outsource your payroll work to. Many payroll services give an impression of being cost effective at face value, but stack multiple hidden fees which can exponentially increase the fees for your business. As such, you should read the terms and conditions carefully while questioning the vendor over any aspect that you are unclear about. 

These are four primary factors that you need to consider when deciding on a payroll specialist company to partner with. To find out more, talk to professional payroll agencies today.