So, you’ve done some research into the benefits of outsourced payroll and your business is a good candidate. There’s no doubt that outsourcing your payroll can offer many advantages such as improved compliance, efficiency and automation. However, there are many payroll outsourcing companies out there. At first glance many of them offer a similar solution which can make it tough to choose the best provider that is most relevant to your business needs.
Ultimately, you need to look for a provider with a solid reputation. One that manages your payroll in line with industry best practice and delivers a 100% compliant service. Outsourcing your payroll needs to be done with careful consideration. You are effectively choosing a business partner that will have access to sensitive company information.
To help you identify the best provider, here are three things to pay close attention to.
- Legislative compliance
If your business operations cover multiple territories, you want to make sure that your payroll provider is legislatively compliant in each country in which you operate.
Some regions are particularly challenging when it comes to achieving and maintaining legislative compliance. In various African countries, for example, legislation can change overnight and if your business doesn’t follow suit immediately, it could face a fine. There are also cases of companies misinterpreting a crucial regulatory clause. It doesn’t matter how innocent the oversight or error; this lack of compliance will have consequences.
To avoid running into any legal dramas or costs, you want to ensure that your operations are compliant at all times. A payroll provider with a robust multi-country solution has the experience and knowledge to take care of this for you.
- Data security
The protection of personal information is increasing in importance. The General Data Protection Regulation (GDPR), for example, will come into effect in May 2018. This new legislation will transform how payroll functions manage and process sensitive information. The GDPR is not just focused on customer data– it will also apply the employee information that businesses keep.
Now, before you brush off GDPR as something that will only affect businesses based in Europe, consider this: its mandate is to protect all EU citizens’ personal information. If your business employs EU citizens – even if they’re based in an office outside of the EU – or, has European business interests, then you will be affected.
To reduce the challenge of complying with the GDPR, it makes sense to work with a payroll provider that is already compliant. This allows you to spread the responsibility of keeping employee information secure. Payroll managers as well as payroll software providers can make sure that employee data is encrypted and secure. The bottom line here is that not only do you need to be serious about data security, you need a provider that is just as serious too.
- Conflict of interest
Before entering into a contract with a payroll provider, give some thought to potential conflicts of interest that could appear down the line. Outsourcing your payroll to a supplier that will at some point have to audit your business, for example, is a direct clash with Section 90 of the Companies Act. This states on page six that: “the independent review of the company’s financial statements must not be carried out by the independent accounting professional who was involved in the preparation of the financial statements.”
The Companies Act does go on to explain that the classification of financial records includes assisting clients with outsourced payroll systems. In other words, you could be forced to change your payroll provider should the financial services company in question be tasked with auditing your business.
When choosing your preferred payroll provider, you need a bit more than good chemistry. You need a partner who understands your business challenges, is familiar with the regions in which you operate, is up-to-date on and compliant with all relevant legislation including GDPR, and has the technological know-how to deliver an efficient, seamless solution. You want the implementation process – as well as the ongoing relationship – to be stress free and add real value.
If you’re ready to outsource your payroll but don’t know where to turn, chat to the PaySpace team today. Once we know your needs, we can help you make the right choice.