Outsourced payroll requires none of the above, because a business is able to hand these responsibilities over to a third-party firm who specialise in handling all facets of payroll administration. Therefore, outsourced payroll is the outsourcing of business payroll functions to an external agency.
How Does Outsourced Payroll Work?
With society currently connected like never before through the internet, dealing with your outsourced payroll service provider is as easy as walking to the office down the hall. Most correspondence is performed via the telephone or via email, which is super convenient. If you’re thinking about outsourcing your payroll services in the near future, these are the steps you could take to make the transition as smooth as possible:
Step 1 – define your requirements
The first step is actually to decide that you would like to outsource your payroll, but once you’ve committed to the decision, the next step is to define the outsourcing scope of your payroll. In other words, you need to decide whether your service provider is going to take over certain payroll functions, or deal with the entire payroll process from start to finish.
Step 2 – compare service providers
The next phase of outsourcing your business payroll is to look at the providers in your area that offer outsourced patrol services. A good idea would be to pick one that is in close proximity to your business so that face-to-face meetings can be arranged. Weigh up providers in terms of costing, scope of services, and community standing (check references).
Step 3 – pick & meet with a provider
This step in the outsourcing process requires you to make a decision on a provider. This is quite a big decision, as your chosen payroll outsourcing provider is going to be in charge of a rather important aspect of your business administration. Here’s what to consider when making your pick:
- Are they close enough to meet in person?
- Do they have a proven track record?
- Are they willing to adapt to your needs?
- Do they remain abreast with modern industry trends?
- Are they willing to deal with the taxman on your behalf?
- Are their reviews from past clients positive?
Step 4 – service level agreement
Penultimately, once you’ve given the nod to a service provider, you’ll need to draw up a service agreement (this is often done by the service provider themselves) which should clearly define the following critical information:
- Responsibilities of each party
- Accountability should errors arise
- Time limits on various payroll functions
Step 5 – implementation
The final step to outsourcing your payroll services is to transition your business from in-house payroll (where applicable) to outsourced payroll. This might require training your HR staff, and a good idea would be to find out who your contact person is in the third-party firm. That’s it – once you’ve done the above, the only thing left to do is breathe a sigh of relief that you have one less headache to deal with every month!