Nobody likes doing the payroll. For many businesses, this is an expensive and time-consuming venture that everyone could do without. That’s why many companies choose to outsource their payroll; it takes the burden off their shoulders and guarantees a mistake-free process for all their employees.
It’s crucial that you choose the right payroll outsourcer for you, as this is such an important process. We don’t blame you for trying to keep payroll close to home (it feels safer, even if that’s not necessarily true), but you can benefit hugely from outsourcing.
Do You Need To Outsource?
You can, of course, internally process your payroll, but unless you’re a small firm, this is inadvisable. Sorting out the payroll is an extremely complicated task and it’s easy to make mistakes. The payroll landscape is constantly changing and you can risk pricy penalties for getting it wrong, as well as a lack of faith in your staff. You really don’t want to miss pay day. Your staff relies on it.
According to the Internal Revenue Service, one in three employers has been fined for a payroll mistake. This can easily be you. If you’re still against outsourcing, there is payroll calculating software programs that can help you out – these aren’t always 100% accurate or self-updating, however.
When You Know You Should Outsource
If you have a reasonable-sized firm and plan to expand, you really need to outsource your payroll. It’s a more cost-effective option, as it frees up your employees’ time. It also passes the buck to a company that specialises in payroll, which means it’s unlikely that any mistakes will be made and they will be the first to know when any changes in legislation occur. If any mistakes to occur, then it’s not your responsibility – the payroll business will pay any fines.
Choosing A Provider
This can be difficult. If you have a good relationship with another company, you can ask them to recommend a great payroll outsourcer. Word of mouth is usually the best way to find a high quality provider, but you can also do your research online. Get several quotes, before you make your final decision. Make sure that they agree to a contract where they are responsible for their mistakes and financial mishandling.
Look at the other clients that they work with. There should be a very long list of reputable firms. Ask lots of questions and note how well they respond.
In the beginning, you’ll want to just keep tabs on them. This won’t take up much time; just monitor how well they do. All payments must be paid on a previously agreed date and time. If they can’t hold their side of the bargain, that’s a deal-breaker. Check that all the math adds up for the first few payroll slips. If they can’t get it right the first time, you have a serious problem on your hands.