Business & Finance Article December Yearbook 2009
The payroll function is at the heart of organisations yet all too often it is taken for granted. As payroll is one of the largest costs to any business, it requires a thorough understanding of the legislative and calculation processes. However, the resources required bring no added value to the business.
Many companies mistakenly believe that processing their payroll in-house is the most cost effective method of fulfilling this repetitive function. In fact, the cost of processing payroll in-house may be up to five times more expensive than outsourcing when you take into consideration the real cost of retaining qualified staff who have been competently trained in their profession. Aside from the gross salary payable, organisations should consider the less obvious costs of training, holiday and other leave, employers PRSI, hardware and software costs, consumables, data storage and opportunity costs. Additionally errors in payroll can cost a company dearly through incorrect calculation of the various taxes and levies or contravention of legislation.
As the benefits of outsourcing payroll gain momentum in Ireland, engaging the right outsource provider is crucial. We advise companies to discuss their payroll with a few providers to ensure that they feel comfortable working together. The values of the provider should match the culture of the company. The personal relationship we have with each of our clients enables us to work almost like a department within their company rather than an external firm. It is important that the trust is there from the beginning so check out references from other clients.
Ensure that you are confident with the service offering and the level of expertise to handle the various changes in employee and business circumstances. Compliance and accuracy requires professional and on-going training in the various aspects of payroll calculations and legislative regulations. Enquire about back-up and contingency plans to safeguard continuity of service and protection of critical personal data. A reputable and established provider will be happy to discuss your concerns and provide a flexible solution to suit your needs.
Outsourcing this repetitive back-office task to a reputable provider ensures the client receives the optimum service of qualified and experienced payroll professionals as they need it while retaining control of their payroll outputs. Given the benefits of payroll outsourcing it stands out as not only a viable option, but for many cost conscious businesses, the most sensible option available.
Business & Finance 16th December 2009.