Payroll providers: Great expectations versus reality

Companies should guard against misconceptions over the services they should be getting from an outside payroll provider

Outsourcing payroll functions can be an effective way for companies to ensure payroll is managed by professionals who know what they’re doing, especially if payroll experience within the company is limited. However, sometimes there is a misalignment between what a payroll supplier can provide and what a company expects, says Cande Dandele, executive vice-president, marketing, at Ceridian Canada Ltd.

It’s important for a company to understand what it is buying, she says.

“A payroll supplier doesn’t own ultimate responsibility, it has to be a partnership,” she says. “The customer owns everything up until they enter it into our system. We can provide reports but a company can’t abdicate responsibility.”

Misunderstandings generally arise out of a lack of clarity on roles and expectations, says Dandele. She cited company policy as an example of this.

“We don’t interpret company policy, companies should create it first,” she says. A payroll provider also cannot define the company policy on payroll issues, she added.

Partnerships

The issue of misaligned understandings can be solved by approaching the relationship as a partnership, says Dandele.

“The problem with payroll is, no one is interested in it until something goes wrong,” she says. “There is a danger of treating it as a commodity.”

When a company enters into an agreement, it needs to have all key stakeholders involved — which includes the day to day workers, she says.

Despite those expectations, Dandele says if a company has a need in mind, it is likely the payroll provider can help.

“There are things payroll providers don’t do, but there is more that we do that they don’t realize,” she says.

Defining needs

Sometimes there is a disconnect between what a client wants and what they choose for a certain price point, says Janice MacLellan, director of industry relations for ADP.

If a company isn’t getting the service expected, management needs to be able identify it, then communicate what’s missing, she says.

“There needs to be an ongoing dialogue,” says MacLellan.

For example, a company may need to reassess its need when a change happens within the organization, says MacLellan.

She cites a case of a small business client that had one individual responsible for accounting, payroll and office management. The company wanted to free up that person’s time, so it found a payroll service to achieve that.

However, the individual soon decided to leave the company and the replacement did not have as much experience with payroll systems. The company initially thought the change in personnel wouldn’t impact its payroll process, but problems arose because the original service the company selected was based on the first employee’s skill level — which was significantly higher than the new employee. The company had to choose a new service from the provider to reflect that.

Find the gaps

One service employers are not taking advantage of — perhaps because they are unaware of it — is time capture, says MacLellan.

“Probably the biggest part of the payroll process is gathering data and making sure it complies with policies,” she says.

A payroll person has to make suremanual time cards, absenteeism and vacation days comply with policy. Many do it manually, and that’s a lot of work for a payroll professional before he even sits down to work on payroll, she says.

A lot of business rules can be included in an online process, but employers aren’t taking advantage of that, says MacLellan.

Ultimately, MacLellan agrees a partnership between the payroll provider and company is essential. It helps ensure a company receives the services it needs — or, at least, has steady communication so it can identify what it isn’t receiving.

Angela Scappatura is a Toronto-based freelance writer.


WHAT TO ASK WHEN OUTSOURCING PAYROLL

Making sure a payroll supplier provides the service needed

JaniceMaclellan, director of industry relations for payroll provider ADP, suggests the following as good things to ask a provider when outsourcing payroll:

•Do they provide payroll to similar companies in the same industry?

•What basic services are covered?

•Does the supplier take advantage of new technology trends?

•How quickly do they implement new government legislation? Are they up to date?

•Do they have a global footprint (provide services to companies in other countries)?


Finding the payroll service that’s right for your organization

Luckily for you there are several ways to outsource your payroll preparation, check writing, filing taxes and everything else that comes with the payroll process. So here are three tips to help you find the best payroll preparation service.

1. The payroll service you choose should hold itself accountable for mistakes made, but this happens very rarely and there is usually time to reconcile any mistakes. If there are mistakes that were not caught in time, your payroll service should pay for all fines and penalties that occur.

2. The best payroll preparation service will allow you to work from anywhere in the world with an internet connection. A local payroll service will do you no good if you cannot reach them from another state or province. Therefore, the payroll service you choose should have all the things you need to perform payroll tasks online.

3. This third tip covers more from the second tip because it is so crucial. Being able to do your payroll online is the easiest and fastest way to take care of paycheques, taxes and filing forms.

Finding a good payroll preparation service does not have to be a hard task. Once you know what you need to get done, it can be very easy to find a solution. There are thousands of companies local and online that will provide you the best payroll services. But look at the internet first because of the convenience.

There are also good payroll services online that cost nearly nothing, ranging from $25 a month to hundreds of dollars per month. It's your decision on what your needs are.

Source: Eric Lass (http://EzineArticles.com/?expert=Eric_Lass)

Latest stories