Managed Payroll Services: What You Need To Know
As a business owner or payroll manager you are not only responsible for making sure your staff is paid accurately and in a timely fashion, you also have the constant pressure of compliance, time tracking, and all the other aspects of managing and processing your payroll every pay period.
The cost of the labor alone can be enough to cause you to consider automation or outsourcing options such as managed payroll services. And the prospect of letting someone else take on the reporting and paperwork makes those options even more appealing.
But where do you go? What kind of service do you really need? And do the benefits outweigh the time and cost of managing your payroll in-house? For starters let's look at managed payroll services and what they do:
What a Managed Payroll Service provider will do for you
Using managed payroll services means outsourcing all the functions of your payroll process. This will include all the related data entry, generating reports, and maintaining compliance. As the client, you will be required to provide the necessary payroll information to the payroll services provider. Other related services may be available, but the bottom line is that aside from collecting the appropriate payroll data, you have to do little else.
Businesses of all sizes often find that this is a suitable and cost-effective approach to managing their payroll needs as it reduces or eliminates their administrative and personnel costs. In addition, a business does not need to have pay, taxation and compliance expertise as the service provider manages that for them. Annual changes in tax codes, statutory payments and deductions, and staying on top of compliance with the current legislation can require a full-time position for many businesses!
Once you have determined that a managed payroll service provider may be the answer for your business then there are certain things you need to look for in a provider:
- While some firms may offer highly competitive pricing for their services, knowing that they have been around for a significant period of time and rate well with their clients is critical
- Looking at review sites online, customer comments on the company's blog, and referrals from colleagues are key points in determining the quality of a service provider's reputation
- In addition, talking with actual, current clients is an absolute must before making a decision of this level. If a provider is reluctant to encourage you to talk with their clients then that should be a "red flag"
- All managed payroll services providers use technology, but not all technology is created equal. While state-of-the-art software can be a plus for a provider, a deep knowledge of and expertise with a solid technology will serve you more
- The software and technology used by the provider should be adaptable to your business, not the other way around. The whole idea of outsourcing your payroll functions is to make your life easier.
- Look for a provider that offers additional services such as time management, insurance or other HR functions. While you may not require these, knowing that the provider is competent in them is a good sign that they are a full-service provider
- A good managed payroll services provider will go to great lengths to understand your business and your payroll service needs. Look for a company that is willing to ask questions and display a clear knowledge of not only what they can do for you, but what you really need from them.
Hiring a managed payroll services provider is no small thing. While the cost will be easily made up in savings over time, it is a significant investment and should be approached with the appropriate due diligence. But it is also a decision that can free up essential resources for your future growth and success.