Most small-to-midsized enterprises (SMEs) are often advised by BPO consultants to outsource their payroll, for good reasons. First, payroll is a non-core function, which means it’s outside of the activities that earn revenue for the business. Taking care of it yourself will keep your attention away from other activities that can increase your profit margin. Second, compared to partnering with a payroll services provider, hiring another personnel solely to take care of payroll can be a big financial burden to a small business or a startup. And last, outsourcing this function allows your company to benefit from the technology and processes payroll services providers have; they invest in payroll software and systems so you don’t have to.
These reasons, however, do not mean that you can hand over payroll functions to a BPO company off the cuff. It’s not in your business’s best interest, after all, if you allow just about anyone to access your financial information and view the salary of your personnel. Also, you’ll want to work with a service provider that consistently delivers accurate and timely information.
So how do you sift through the thousands of payroll services providers that are vying for your business online? You can use the checklist below to find a good payroll services company:
- It’s very easy to make mistakes with numbers, that’s why 1 in every 3 business owners are penalized by the IRS for payroll errors. Getting a professional to handle payroll functions should help minimize these errors. If the provider made the error, then they should own up to their mistake, coordinate with the tax authorities, and take care of the interest and penalties.
- Exceptional track record. A good payroll services provider should have a long list of satisfied clients who have stayed with them for a long time. Look for reviews and testimonials on the company’s website and beware of providers that have a high client turnover rate or have been in trouble with the authorities.
- One of the reasons many business owners make mistakes when processing payroll is because they are not immersed in it every day. Payroll companies should have a team of seasoned professionals who keep themselves updated with the latest standards and newest regulations pertaining to salaries and taxes, thereby reducing the possibility of making mistakes.
- As mentioned earlier, outsourcing payroll costs less than hiring another fulltime personnel. In addition, many providers offer flexible payment schemes, so you only have to pay for services that are of use to your business. When looking for a provider, check if your options can also handle any future payroll services your company might need. This way, you won’t have to look for a new provider when your company eventually grows. Also, inquire how much it will cost you in case you need to scale up the service package for your company.
- Security and privacy. Trust is a big factor when deciding which company to partner with, especially if you are sharing financial information. It’s difficult to determine if you can trust a provider, but you can always look for reviews from the company’s previous clients to help you decide. Additionally, you also have to inquire about the security measures the provider has put in place to prevent data tampering and information leaks.
- Technology and tools. Automation and using the latest technology can help your provider finish the job faster. This, in turn, drives down service costs and translates to more accurate and timelier service for your company.
More than just saving your effort and money, a good payroll services company helps keep your employees happy and prevent any trouble with the authorities. By choosing to outsource to the right provider, you’ll also gain peace of mind and more resources to devote to your business or personal affairs.