Monday, June 27, 2022

Things to consider before outsourcing payroll services.


Things to consider before outsourcing payroll services

More businesses are opting to payroll outsourcing to reduce risk and stay focused on other important strategic goals.

Payroll service is now no stranger to Vietnamese small and medium-sized enterprises (SMEs). Nonetheless, selecting a reliable, responsible and suitable partner remains challenging. Here are some reminders for businesses when outsourcing payroll services.

Things to consider before outsourcing payroll services

Company size

Company size should be taken into priority when it comes to payroll outsourcing. Keep in mind that not every accountant shares the same expertise, so don’t expect to find a trustworthy accountant, who specializes in both payroll processing and internal accounting, with a low expected salary.

Most SMEs often hire newly-graduated accountants with a monthly salary range of around VND6-7 million, who are required to perform various tasks including office administration, payroll processing, internal accounting, monthly and quarterly tax declaration, etc. Instead, payroll service is a more viable option that cost less than in-house staff, yet ensures legal compliance and confidentiality for your company.

Things to consider before outsourcing payroll services. (Photo: Internet)

Do your own research

In today’s IT-led world, there is a plethora of information about the scope and cost of payroll outsourcing that you can find and refer to on the Internet. You should be cautious of any provider offering numerous promotions or free-of-charge basic services. It’s better to look for a reputable company when in need of a full payroll package.

Arrange meetings with 2-3 payroll outsourcing companies

After thorough research, you should meet with 2-3 payroll outsourcing companies to discuss the following matters:

● Responsibilities of each party

● What are the responsibilities of the employer to the state authority?

● Does the cost match your company’s budget?

● What are their monthly customer services like?

● What are the ways to update your company’s payroll monthly?

Arrange meetings with 2-3 payroll outsourcing companies to discuss related matters. (Photo: Internet)

Data protection and security 

The safety of your employees comes before all else and as an employer, you’ll need to take extra measures to protect the sensitive data related to payroll activities, namely employee addresses, banking details, among others.

Understand the processes carried out by the provider to encrypt sensitive data, the type of technology they’re using to safeguard data from being compromised, the list of users who have access to the information, and what type of business insurance the provider has.

Make sure that outsourced payroll services take great care of data security. (Photo: Internet)

It is recommended that you should find out about the payroll provider’s background to check that they can be trusted to ensure the integrity of your data. Certifications such as ISO 27001 and ISAE 3000 are the international standard for information security management, often referred to by organizations for quality assurance.

Enhance visibility with performance metrics

Payroll is vulnerable to risk as its structure comprises different components. Hence, you should look for providers that have a clear communication plan and reporting interface when weighing up the options. This helps you with a better understanding of the performance metrics behind your payroll processing.

Choose a payroll service that provides you with easy-to-understand reports and simplified processes. (Photo: Internet)

Learn more about basic features on offer and whether the management reporting dashboard is easily accessible and suits your company's needs. Some payroll services also include an employee self-service portal – a useful tool that enables direct access or personal information adjustment.

As payroll becomes more and more complicated for many businesses, partnering with a payroll service provider can help you reduce risk and free up time, resources for other business aspects.