Payroll Outsourcing

Efficient, cost-effective payroll outsourcing is mission critical for just about any business you can think of. You can’t afford to select the wrong vendor, only to find out after the fact you don’t have the functionality you really need. Nor can a company afford the disruption and cost of changing to yet another solution for your payroll needs.

When it comes to payroll outsourcing, doing your thorough due diligence on the front end will pay off in spades on the back end. But who really has the time? For that reason we’ve put together this white paper on the top questions you should be asking your potential payroll vendor.

Scope of the topics you should be concerned about:

1. Make sure your potential payroll outsourcing choice provides the features you’ll want to leverage for not just the present day, but long into the future. You’re payroll vendor should offer integrated components such as:
   
   1. Fully integrated Human Resource Information System (HRIS). The HRIS system should be scalable to allow you to use the parts of it that you care about. Using a HRIS system where you’re utilizing 10% does you no good, as they’re typically expensive.
   2. Have the same point of contact, regardless of the solution. This is one of the most important aspects of a payroll outsourcing vendor. Having one contact who becomes familiar with your activities in any of the outsourcing disciplines will be a quantum leap in your overall satisfaction with your vendor choice.

If the vendor you select for payroll outsourcing cannot provide a single source of contact, regardless of the discipline, you could be missing out on significant value. We’ll touch on this later.

2. (SaaS)? This type of payroll outsourcing allows for more convenient access, easier deployment, greater reliability and freedom from local IT support. SaaS payroll outsourcing enables companies to access these solutions through an internet browser, rather than installing software on your internal network. Installing any kind of software requires IT support, an upfront capital expense and maintenance
3. Even if a payroll vendor provides a SaaS solution some additional questions should be asked:
   1. How many years has the payroll outsourcing vendor been delivering the service model this way?
   2. What measures are in place to ensure the security of the client’s data?
   3. Does the payroll outsourcing vendor participate in audits and certifications such as the SAS70 Type II audits?

4. Does the payroll outsourcing vendor deliver not only a library of ready to use templated reports, but also a flexible way to tailor data to what suits you? Professionals who are in the market for a payroll vendor list insufficient, costly or inaccurate reporting as a top 5 reason for seeking a new payroll outsourcing vendor.

A major source of revenue for payroll outsourcing firms is the nickel and dime charges for custom made reports. They charge for not only the report deliverables on a repeating frequency but also the cost to build the reports. Be sure and find out what the payroll vendor’s policy and abilities are. Find out how their customers create new reports, does it require IT resources or custom consulting – or can end users create their own reports quickly and easily. Find out what the cost would be and the procedures/timeline for the payroll outsourcing firm to create the reports. Find out what the functionality is for the ready-to-run templated reports. Can they be date driven, what restrictions are present, do the reports have calendar year barriers? Will the system be able to generate email notifications for specified events? Find out how many and what kind of reports come templated with the system? Find out what are the output options are with reports.

5. Does the vendor’s Human Capital Management solution deliver a web-portal with 24/7 self service for all levels of your company?

Why would you want this, you might ask? Efficiency, plain and simple. Delivery of important information pertaining to what is paid to employees should be you’re highest concern. Allowing for supervisors/manager and administrators to have access to payroll information easily and quickly will only allow them to make decisions better. Employees should be able to have access to their salary history, benefits, paychecks, W-2’s all from an online portal. What would they do if they did not have access to this information? They’d ask their payroll department, thus creating a good percentage of work that exists for the payroll department in any company. Eliminate these inquiries. Make sure your payroll vendor allows your employees to print their own:

• historical paycheck detail
• year to date pay for any year
• prior year W-2 statements

6. Will the payroll vendor’s software allow you to enter employee information only once? Ask your vendor if their payroll software can:
   1. Capture employee time from various methods and hardware
   2. Automatically notify managers/supervisors of important daily/weekly/per pay period events needing their immediate attention
   3. Approve time and exceptions quickly
   4. Provide a workflow of approving timesheets that incorporate several levels
   5. Allow for single input for all employee data, ensuring a flow of data into HR, Payroll and Time & Attendance areas
   6. Seamlessly deliver time & attendance information directly into the payroll engine
7. Support: Does the vendor offer single point contact for all services? Frequently what happens when a client gets involved with more than one discipline, support contact will change. When going with Time & Attendance, payroll and/or HRIS services – payroll outsourcing companies will provide support from different locations, sometimes even different countries. For best service the vendor should provide same single point contact, regardless of the service. This way you’re ensured of fast, clear advice on you’re needs. Involving different support staff, depending upon the service in question is never just the service in question. Services such as Time & Attendance, payroll and HRIS are so entwined in the present day technology. Doing one thing in one area – very often effects what is done in other areas. Having one consultant to coordinate/support you’re efforts on all disciplines goes a long way to your satisfaction and ultimately an accurate payroll. Call Center mentality towards support will only frustrate you.

When considering a new payroll outsourcing vendor, take your time and be thorough with your research. Avoid general questions when interviewing your options, focus on what we’ve outlined here – you’re payroll staff will thank you in the long run.

For questions about this paper or for more information, please email us at info@balancepointpayroll.com.