There are a lot of good reasons to outsource your payroll. A global, robust solution can help companies abridge the process of managing their payroll in multiple locations. Rather than having to obtain and manage several payroll service providers in every location, your human resources and procurement team just requires administering a contract. This considerably reduces the administrative burden.

The argument for outsourcing your payroll is solid: you can reduce your business costs, keep your operations in compliance and develop efficiency. But the process is not always fluid. There are 2 very common outsourcing problems that can cause a company to rise suddenly. Let’s take a faster look at what they are, and how you may avoid them.

Problems with Outsourcing Your Payroll

Let’s start with the great problem first. By delivering information and controlling your payroll to a third-party vendor, you deliver critical information that can end your business. Imagine if you want to know what would happen to your business or organization with a contractor doing your payroll this week. Answer these questions below and see how many would answer yes for sure.

  • Know all the allowed payment rates, assignments and awards for all your employees.
  • Understand your superannuation obligations.
  • Easily understand how to verify or calculate your payment as the payment of taxes for each employee progresses.
  • Detect if the payments went to a false or nonexistent employee.

This is where the main disadvantage of outsourcing reaches a critical point. You still want to know what needs to be entered into the payroll system, you also need to know how many employees are to be paid and how much, and if the payroll contractor is really making their tax payments as needed.

Your Employees Will Still Blame You

Once the payday comes and goes, your employees won’t care who pays the payroll. If employees are not paid, they will come to find a solution. This means that you will have to chase the payroll service provider and hope they may clarify the situation and fix it fast so that your company can return to work. It is not an uncommon event, but it is known that payroll contractors make payments to themselves or clean their bank fully without you knowing it for several days.

Payroll Management Can Be Worse Than Doing It

Before outsourcing your payroll, first I want you to think about some facts. You must have all the payroll information ready to deliver to the contractor anyway. Then, you must explain any document of the organization, attendance sheets or employment contracts before starting. In addition to this, you will need to spend more time reviewing your work to make sure it is being done correctly.

I suggest that you provide them with a set of sample time sheets and proof that they are capable of managing the payroll before leaving them loose in their systems. Also, this will need you to update your insurance to cover any problems that may arise when using payroll services and the suspension of employee salaries.

Conclusion

Remember that they will have all the personal records of your employees and the tax information that you must protect according to the Privacy Act, and you have not been granted permission to deliver it to a contracted payroll service provider.

Related Posts: