Gain Your Competitive Advantage through Outsourced Payroll
Most companies exist for a specific reason – because they are uniquely able to produce a product or deliver a service that there is demand for. As business evolves, new industries are created when the market demand for a service is broad enough to motivate one or more companies to figure out the most cost-effective, scalable way to provide that solution or product.
As a business owner, it is vitally important for me to make sure that we have the staff and resources to do what it is that we are uniquely capable of doing, while selecting the right business partner for any of those things that are not directly driving our bottom line. At Checkmate, this means that while we are experts at servicing our clients on our Workforce Ready technology platform; we are not software developers, so we have, in essence, outsourced this to Kronos/SaaSHR.
Likewise, when we need to install a new phone and extension, we don’t pay someone on staff to figure out how to do this. We call our telecom provider.
With the vast array of different businesses out there, from CPA firms to manufacturing operations, to restaurants and auto dealerships, it might seem like the needs of each industry would be widely different. But, there are a few aspects to running and managing a business that apply to all employers. Payroll processing is one of these.
- All employers must pay their employees. All employers must pay their taxes. All employers must utilize the banking system.
- Unless you are a payroll company – your competitive advantage will not likely be found in the manner with which you have decided to manage your payroll internally.
- Payroll and labor laws are complex and frequently changing. Employing a payroll professional and paying for their continuing development is very expensive.
- 35% of the average HR department’s time is spent on payroll alone when handled in house.
For these reasons, it makes sense for the vast majority of employers to outsource their payroll processing and tax filing needs. So, what factors should you consider when selecting the partner who will help manage your #1 operating expense?
The price that you pay for payroll processing services should be a point of consideration, insofar as you are making sure that you are not simply paying the cheapest price, lest you get what you pay for in the way of cheap service. Payroll is not a commodity, despite what some of our major, national competitors would have you believe.
Would you hire an apprentice to re-wire the power to your server room? Or, would you hire the master electrician who has dozens of years of experience and can quickly and expertly identify the elements of your situation that need special attention vs. the run of the mill wiring work that anyone can do? Do you want to work with the same individual who will get to know you and your company’s payroll servicing needs or be served by a revolving door of newly-hired call center representatives, never speaking with the same person twice and/or getting the same service, answer or resolution?
Payroll is why your employees show up to work in the first place. No matter how much you’re able to outsource, the integral nature of how payroll keeps your business running means that you need to understand the fundamentals in a way that you might not with other things that you outsource, like electrical work. If your business offers benefit plans, 401(k) or you employ anyone with child support or other wage garnishments, the complexities of payroll can become overwhelming. One of the most important factors in selecting your payroll partner is the extent to which you have access to the expertise that you need to effectively outsource this aspect of your business. With the variety of web based payroll applications, it might seem like the offering that Checkmate provides must be the same thing as what you can get anywhere else. The difference is seen in what happens when you need your payroll partner to educate and share knowledge with you. It should be just as easy for you to lean on your payroll partner for knowledge sharing and compliance oversight without a bunch of hidden fees as it is for them to automatically collect your invoice every time your payroll is processed.
If payroll is the reason why your employees show up in the first place, then you should feel compelled to provide them with easy access to their own information (pay statements, W2s etc.) taking the burden off of your having to constantly reproduce this information. These days, this should just be a default part of the offering from any payroll vendor. Intuitive, easy access to online pay statements, and W2s, with email notification reminders about when payroll is due, employee birthdays and anniversaries etc. – these are the elements of payroll processing service that are truly a commodity.
In addition to basic elements of Employee Self Service, some other technology considerations include:
Online Account Management
The ability to manage all aspects of your payroll account online. From entering new hires, to updating/maintaining employee information, and entering hours worked and salary details in an online pay grid – online account management gives you access to own and manage all of the information associated with your workforce.
General Ledger Interface
The days of manually entering payroll data into your account system are OVER. Payroll companies that offer the bare minimum of what I would call good technology can provide you with a completely mapped G/L solution, which will produce a file with every payroll that you can import directly into your accounting system. Whether you’re using QuickBooks, Peachtree, Microsoft Dynamics, or an industry specific product – there is no reason why you’d need to rely on data manipulation and manual entry to keep your books up to date.
Intuitive Report Creation
One of the most frustrating aspects of outsourcing payroll tends to be the quality of the information that is provided to you via payroll reports. In the old world, you wouldn’t have access to more than the most rudimentary check registers and tax liability reports using your company’s own data. Today, with good technology and little bit of “figuring it out,” you should be able to get the exact data that you need, where you need it, when you need it, in the proper format. The data in your payroll account is your data. When you select the right payroll partner, you’ll never feel like your data is being held hostage or that you need to be able to write code to get the analytics that you need.