Payroll is an integral part of your company’s operations. Without an experienced team in place, you risk making mistakes that can cost you in the thousands or even millions.
Using a payroll outsourcing services is a great way to ensure that you meet all of your corporate obligations and regulatory requirements without experiencing any problems.
What is Payroll Outsourcing?
Payroll outsourcing is the process of choosing a third-party payroll specialist to take over your payroll processes. A payroll outsourcing services provider can take care of the following functions for you from start to finish:
- Compensation structuring.
- Deductions management.
- Mandatory contributions.
- Salary reporting & management.
- Taxation filing & returns management.
- Time & absenteeism reporting, leave management & vacation management.
Benefits of Outsourcing Your Payroll Process
1. It can streamline operations
A payroll outsourcing services provider brings with them both the job knowledge and the technological resources necessary to administer your company’s payroll. You won’t have to spend money on hiring a payroll team, investing in the different payroll technology and training them on the payroll process. Instead, your payroll outsourcing company can immediately get to work and ensure your company’s payroll process is a well-oiled machine.
In fact, ROI on payroll is high if you outsource it to an adequate partner who can sufficiently assist you and your HR team.
2. It can help increase employee satisfaction
When you have a robust and dependable payroll process, all salaries are ensured to be credited on time. Additionally, leaves are processed correctly and employees are reminded to file their taxes on time.
When their economic needs are cared for, your employees feel a sense of security, which increases their workplace happiness, job satisfaction, productivity and commitment to your company.
3. It can strengthen security & compliance
Payroll fraud can occur due to numerous reasons:
- Timesheet fraud by employees.
- Padding of working hours and false reporting of overtime by employees.
- Illegal alteration of employee’s pay rate due to corruption, coercion etc.
- Failure or delay in paying advances and/or salaries to staff.
In such cases, it helps to have an experienced payroll outsourcing services provider by your side. Not only will they be able to recognize signs of payroll fraud, but they’ll be able to rectify any issues present. The payroll process outsourcing expert will also have knowledge about regulatory compliance requirements and they’ll be able to help you avoid any legal trouble with bespoke advisory and support.
4. It can give you the freedom to focus on the growth of your organisation
When you have a dedicated payroll outsourcing team taking care of all your payroll responsibilities for you, it eliminates the bulk of administrative distractions letting you focus on other areas of your business. For added assurance, you can establish a direct line of contact between your employees and your payroll outsourcer. This way staff can seek payroll-related counsel as and when necessary. All the while, your time, corporate resources and peace of mind will all be preserved, allowing you to expand your operations as you see fit.
How to Know if Payroll Outsourcing is Right for Your Company or Not
While some companies do have their own in-house payroll teams, you might be better-suited for payroll outsourcing services any of the following applies to you:
- You are a start-up and you don’t have the in-house expertise to manage your company’s payroll.
- You want to speed up business growth by adopting a business structure that focuses primarily on core business offerings.
- You want your in-house team to concentrate on building greater employee value and would rather hire an already established payroll outsourcing services provider.
- You are planning to set up your business in another country and need payroll specialists experienced in that country’s payroll process regulations.
- You have too many employees across different countries/continents and you are finding it difficult to manage cross-location payroll.
- You are looking for a professional service guarantee and want high-quality and affordable payroll management services.
Tips for Selecting a Payroll Outsourcing Services Provider
Now that you know why you should choose payroll outsourcing for your company, let’s take a look at a few tips you can use to hire a payroll outsourcing services provider:
- Make a list of all payroll processes you need help with. Shortlist companies that offer those services.
- Make a list of important payroll questions you want to ask your prospective outsourcing specialists.
- Ask the payroll outsourcing services provider to share reviews and feedback of their work. Check Google reviews and LinkedIn testimonials to know how previous/current clients feel about the company.
- Ask to review any licenses or certifications they possess for trustworthiness. A reputable payroll vendor will typically have ISO 27001, and SOC2 certificates.
- Check if your prospective provider’s payroll solution is compatible with your own and can be integrated with existing systems
- Find out if they provide a dedicated implementation manager to help you start the payroll outsourcing process.
- Interview their tax compliance team to figure out if they are well-versed with your geography’s tax laws.
- Find out what type of customer support they offer and whether in-country support is available to your company and your employees as part of the outsourced payroll process.
- Discuss the cost of payroll management and negotiate your package.
- Decide when to onboard your payroll outsourcing provider. Usually, the second quarter is a great time to start your outsourced payroll process, since it doesn’t interfere with the year-end payroll management already in place.
- Enable seamless data migration and eliminate data duplicity by having your HR team liaise with the payroll company. Work with the provider to integrate their payroll technology into your own.
How Does Payroll Outsourcing Work?
Provide Initial Information
When you decide to outsource your payroll, first step is to secure commitments on security and confidentiality. The vendor you opt for will hold a great deal of personal information for all the employees in your organisation, so you need to know both that it can protect that data and that it will commit to do so.
It is important to remember that you will be providing essential information of all employees including: names, tax information, withholding details, and everything else that goes into processing pay cheques during each pay period. This provides the framework through which the Singapore payroll outsourcing partner can do its work on your behalf.
Enter Time Electronically
Once the payroll vendor has this information, your next step is to establish the process by which information transfers from your location to the payroll outsourcing servers. Software options for online timekeeping expand almost daily, so you can have your employees enter their hours or use tracking information to identify the times they are on site working. Your salaried employees, meanwhile, can be processed automatically, with only sick and vacation time tracked to go into your accounting.
When you send this data file to your outsourcing partner, they will take care of any manual data entry required to process your payroll. This cuts dramatically into the on-site efforts in the mundane data entry aspects of processing payroll. Multiply the time saved over the course of every payroll in a given year, and payroll outsourcing can pay for itself many times over, every year
Focus on the Anomalies
This does not mean, of course, that you have no need for staffing in the payroll area. Instead, it means that your payroll department can be leaner and focus on areas of concern. Instead of spending time on data entry, they will receive and review reports for any anomalies they might encounter. If time on site and time in payroll deviate substantially, they have time to investigate. If employees make changes to their withholding, earn raises, or change departments, your payroll team becomes free to handle this, rather than trying to scramble to keep up on top of the everyday tasks they have to manage.
Over time, this gives you more freedom to hire better, more qualified people to operate your payroll needs. You gain a dedicated team for the rote entry work that otherwise would occupy your team, and an opportunity for your team to do better, more interesting work in a lower stress environment.
Some people think of outsourced payroll as a way to take away from your team. If you do it right, though, it gives you a chance to get the most from the best people you have.
Choose Links International to Manage Your Asia Payroll Processes
Links International is a leading Asia payroll outsourcing services providers that offers 100% in-country payroll support.
If you are expanding your business to Asia or at least planning to do so in the future and would need outsourcing for your Asia payroll, contact us and we’ll let you know how we can help!
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Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, PEO Secondment, outplacement, recruitment and more! Contact us for more information on how we can help leverage your HR function.