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Top 6 Mistakes to Avoid in Payroll Outsourcing



Have you ever thought of payroll outsourcing services, given how tedious and challenging managing payroll can be? Are you looking for a trustworthy payroll outsourcing service soon so that your payroll needs can be addressed immediately before it obstructs the way your business functions? Outsourcing payroll to a payroll partner will save you a lot of money and effort. It can also help to keep more effective track of expenses within the company. And this is the reason why companies are outsourcing their payroll to payroll service providers. Payroll outsourcing can still be a daunting task, a tough ask of anyone.

And what is the tough part? That of picking the right payroll service provider and of ensuring that they do a good job. And most importantly that they charge just the right amount for the job. Here are five mistakes that can happen in payroll outsourcing and how to avoid them.

No Relationship Manager or Team

A missing relationship manager or team means that the company is not focused enough on retaining the existing customers. If they had a customer relationship team, then it would help bring back disgruntled customers who sometimes see no reason to stay on and end up leaving the payroll outsourcing services provider. Common examples of this happening are when the payroll data is not communicated effectively, payroll software is not integrated effectively with existing third-party software etc.

Lack of Proper Two-way Communication

Sometimes there is a language barrier that is difficult to overcome, even if you try your best. But even when everyone is speaking the same language, everyone need not be on the same page. And herein lies the problem. And this could lead to inconsistencies in services, especially if you have not set the right expectations initially. Make sure you highlight all your points of concern in the brief initially and present it to the payroll outsourcing provider, so that they are well aware of what to do. Also have a business analyst initially analyse the business requirements before you proceed.

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Problems with Data Security in Outsourcing Payroll Processing

Data security is another very important piece of the puzzle, one that could change the payroll outsourcing experience significantly. Every employee’s data is sacred to the company and the employee. To maintain its privacy and keep it secure, its necessary not only that suitable encryption measures are in place but also that the data is accessed only by a few people and not by everyone managing the payroll outsourcing service. To ensure that these happen, you must first discuss the security measures in place and then talk about the security policies, specifically deciding on who the stakeholders will be and how much access each person has on both sides to the payroll data.

Deciding the Method of Operation

Usually when payroll is managed in-house, it is done manually. But when someone outsources payroll processing, then they expect it to be managed much faster, and with greater efficiency and accuracy. How can this happen if the payroll outsourcing services partner is managing payroll manually with a very large team, all of whom have access to the payroll data? To make sure that the payroll outsourcing partner has the software necessary to manage payroll, you must first verify this is the case, then discuss the requirements of the software, check how good and reputable it is, and most importantly if it can be trusted to manage the payroll data of a very large team.

Not Following Tax Laws Carefully

Tax rules may change frequently. In fact, every budget in India generally brings out a new set of tax laws. A payroll outsourcing provider must follow these rules closely so that they remain compliant. Lack of compliance with tax regulations can lead to the imposition of severe penalties. And the problem is that generally the government stays lenient and allows companies the time to rectify their tax problems but companies may take this leniency as a license to continue evading tax, either towards the government or the deductions from each employee’s salary. And this eventually becomes a concern for both the client and the payroll partner.

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Too Costly to Outsource

Sometimes a payroll outsourcing service is just not feasible because the payroll partner is charging a lot for the service. What can be done when this happens? You must decide on what aspects of the payroll you can probably manage in-house and what you want to outsource if it is possible. Unfortunately, this approach does not make much sense, which means that you would need to renegotiate on the price the payroll provider has quoted or opt for another payroll partner who will do it at a lower price but will not miss any of the key requirements you have.

It’s Nice to Avail Payroll Outsourcing Services

A payroll partner can help you navigate the rough seas of payroll management and make your journey a lot easier than it is right now. Outsourcing payroll processing can help you get your payroll in order by first bridging the communication gaps by viewing things in the right context and in the right manner. They will also use trusted software to get your payroll done much faster and a lot more accurately than before and manage your data securely and give access to only the right people.

All these things will ensure that the payroll is processed in the right way and that every employee gets paid on time and with the right salary. Getting paid on time means that employees have the freedom to plan ahead how they will be distributing their time over various responsibilities. Happier employees also mean that the company’s productivity also goes up and the reputation of the company also improves over time. This happens when your employees will let others in their circle also know how great a place to work your company is and how they are paid on time. And when they post positive reviews about your company on Google or Glassdoor. This is when all your efforts in ensuring payroll processing is carried out accurately comes full circle!

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