Payroll 101: Things You Must Know – 1
This is a series of blog posts that will address the most important points related to managing payroll.
The first in this series will focus on “Selecting Your Payroll Vendor – Top 20 Points To Consider”
As you all know, payroll is an essential part of an organisation irrespective of its size. While large organisations hire their personnel and make use of their systems and software to meet their payroll requirements, it may not be feasible for small sized and medium sized organisations to do this. In such cases, these organisations seek the help of a payroll vendor to help them with their payroll processing. While there are industry leaders like TalentPro in the fray, there are also many payroll vendors who compete with one another to provide you with these services.
Here is a quick checklist that can help your vendor-hunting a breeze:
- Determine how much the vendor will charge you for the services provided. Estimate how much it will cost you if you hire staff in your organisation and provide them with the necessary systems and software to provide you with the same services. Ideally, your cost per payroll record per employee should work out less, when you finally decide to take the plunge into outsourcing payroll.
- Once you’ve decided, make a list of payroll services or activities that are part of your organisation. Moreover, ensure that your potential payroll vendor understands your needs and is ready to comply with your requirements. You don’t have to pay for all the features that he has to offer. Consider opting for a vendor who offers easy and uncomplicated means of payroll processing and whose software is customizable.
- Reach out and enquire for payroll vendors who address clients within your industry..
- Often, payroll vendors have experience in offering services to various industry verticals. It is usually a good idea to choose a vendor who has specific expertise in servicing organisations within your domain/industry.
- Ask your vendor for a list of their long term clients. Talk to these clients and ask them many questions to know about their experiences with the vendor..
- Understand that opting for cheap providers who claim to give you payroll services for a low cost need not always be the best choice. Discuss the terms and conditions carefully with the vendor and if possible get a copy of these in writing for you to get a legal opinion. Go ahead and choose this vendor only if your legal counselor finds the details mentioned to be satisfactory.
- Ask if the vendor can arrange for a free demo of his or her payroll services. This can be a good way of judging if the payroll vendor can provide you with all that you expect of him or her.
- If you wish to outsource only a part of your organisation’s payroll services to a payroll vendor, check out if the vendor is agreeable to offering only those services which you want him to do.
- Verify that the payroll vendor has proven credentials to work with tax details such as accessing all the tax reporting forms, meeting tax deadlines, and filing taxes electronically.
- When you enroll the services of a payroll vendor, ensure that the company offering payroll services can grow with you. The company should be open to modifications, as your needs evolve.
- Find out how easy it is to reach a payroll vendor when you want him or her. If needed pay for that 24 x 7 support.
- A right payroll service provider should use payroll software that addresses statutory compliances and is flexible enough to accommodate changing tax regulations, on the fly.
- Make sure that your payroll service provider must be cued to data transfers from your end.
- Request the payroll vendor to provide you with a list of online tools that can help you view how they process your payroll from their office. A right payroll vendor will often be glad to assist you in this regard.
- Find out how the payroll provider will charge you for the services provided. Some of them require you to pay them monthly while a few others may agree to work with you for an annual contract. Choose your vendor after finding out which works for you.
- Ask the payroll vendor if his company will agree to install the software that they use for you on your software system so that you can get familiarized with it. Some payroll vendors offer a trial version of the software.
- Check out the customer services support rendered by the vendor. The payroll vendor must be ready to address any concerns that you or your staff may have, readily.
- Check if the vendor understands the importance of accountability. Good payroll vendors take responsibility for any mistake that they make when they process payroll. They are capable of recognizing these mistakes very soon and correcting them quickly.
- Make sure that the payroll vendor has a development team and appropriate infrastructure that should include workstations, cutting edge computing and network systems, online servers and smart communications systems.
- Security of your data and confidentiality of your records must be covered with an appropriate legal document.
- Ensure that they are in synergy with your need for addressing contingencies and Business Continuity planning.