How to Manage Outsourcing Your Payroll

A company may make the decision to outsource their payroll for a number of reasons. Sometimes the decision is made due to budget concerns as part of a large scale cost reduction strategy; at other times outsourcing payroll becomes necessary simply because there is a general lack of available payroll professionals internally and locally for payroll to be successfully managed in-house; and often it is simply a case of company-wide policy dictating that payroll must be outsourced.

If your company has chosen to outsource their payroll it is important to manage it properly. Firstly, you will have to choose who your company will outsource their payroll to. There are a huge number of payroll bureaus to choose from, so it is extremely important to get a good understanding of all the features they possess, particularly the standard of technology they utilise. Be upfront with your requests for detailed information regarding their range of services. Ask what kind of reports they can deliver, whether they provide online payslips and employee self service facilities to enable members of staff to access and keep track of their payment histories.

It is important to remember to ask for client references and a variety of report and payslip examples to get a clear idea of the type of service you will be receiving. It makes sense to invest some quality time and effort into finding the right supplier and getting a clear knowledge of their range of services so that the payroll outsourcing process can be managed properly. You will need to accurately map all your business’s payroll processes and liaise with your Finance and HR departments to ascertain how best to integrate your outsourced payroll with your existing systems.

You should work closely with your Finance and HR departments to create a detailed pay calendar, establishing clear cut off times for all data to be processed, the transmission of monies to be completed and of course the company pay day date. Time should be taken to ensure everyone who is involved with the payroll process is fully aware of the important information contained within the pay calendar.

At first, the new outsourced payroll system will need to be started to run alongside your old payroll system, until they eventually match and all the data is properly exchanged. However, if the integration with your existing systems proves to be a complicated process, it may be necessary to undertake full test payroll procedures, in which the entire process from start to finish can be closely monitored, and any necessary tweaks to the system can be made in the test environment.

Once the new outsourced payroll system is up and running it is simply a case of making sure all your staff understands the new payroll process. It will only take a short while before your employees become fully versed with your new payroll system and then it is merely a case of maintaining a clear channel of communication open between your company and your new payroll bureau.