Companies often waste valuable time
and resources processing their own
payrolls. It’s work that’s costly, detail-oriented and complex, according to Rob
Gialamas, FPC, the president of Paytime
Payroll Processing, an affiliate of SS&G
Financial Services, Inc.
“Payroll processing generally contributes
little to a company’s strategic goals and
visions,” says Gialamas.
Outsourcing your payroll enables your staff
to be assigned roles that align with the company’s mission. Payroll processing is a service that can be more effectively and efficiently performed by dedicated firms that can lift
time, human capital and tax-liability burdens.
Smart Business spoke with Gialamas
about what a company can gain by outsourcing payroll processing.
What common slips do employers make
when they keep payroll in-house?
Payroll is time-consuming, and it requires
constant attention. Your employees expect
their regular checks, and federal, state and
local governments demand that payroll taxes
and returns be accurate and on time. Few
employees in your organization will appreciate the mundane task of payroll, but they will
be very upset if it is not processed correctly.
The government is even less forgiving. If
you do not file payroll taxes or make tax
deposits in a timely fashion, penalties can be
steep. Most of the time, these late tax payments happen by accident when an owner
gets so busy that he or she overlooks the
deadline. As far as tax agencies are concerned, one day late is too late.
Meanwhile, as you store payroll information on your computer systems at your company or at home, you risk losing critical data.
The most responsible, successful CEOs fall
into these common traps because they simply do not have the time to oversee or manage payroll processing.
What services can an employer expect the
payroll service bureau to perform?
Payroll service bureaus, through diverse
methods, collect and process payroll data
from your company. They offer services that
make business owners’ lives easier, such as direct deposit, employee self-service (ESS),
new hire reporting and payroll debit cards.
They make payroll tax deposits, file payroll
tax returns and assist with payroll compliance issues brought forward by tax agencies.
Additionally, the service will respond to
notices sent by tax agencies in error letters asking for payroll information or other
Services have branched out to also offer
time-saving solutions, such as human
resources products, time-keeping, deferred
compensation plan assistance and system
integration. Like many businesses, the payroll service industry is evolving into a one-stop shop to alleviate the burden of mundane
activities that can be handled out of house
more effectively and efficiently.
What qualities should an employer look for in
a payroll service bureau?
Certainly, all payroll service bureaus are not
alike. Price and value are quite different, and
the first question to ask yourself is how much
flexibility and customer service you desire.
Some services are stringent and require that
payroll information be submitted by a certain
day and time, no exceptions. If you are late, you can expect a fee. Always ask about payroll information deadlines, and find out how
the service will collect your data. Ask about
the service bureau’s capacity. If your company has a lot of garnishments, pre-tax deductions and 401(k) plans, be sure to choose a
service that can manage all of these categories. Also remember, a bigger service
bureau does not necessarily mean you will
get better service. Many large national firms
have established regional call centers. Do
you want to phone a call center with a problem or be assigned to a representative that
will always address your issues? Ask whom
you will call when you need assistance. Find
out what training the staff receives, and
whether they participate in a certification
process offered by the American Payroll
Association. Finally, request references.
What methods can an employer use to dispatch payroll data to the service bureau?
This is a key consideration as you partner
with a payroll service bureau. Again, flexibility and service is the name of the game. Some
companies prefer to call or fax in their payroll information, others route data to the service bureau via e-mail. Today, most companies
use payroll desktop software programs and
Web-based solutions that allow them to view
the data and run customized reports on-site.
The payroll service can grab the information
when it’s needed, and you can access it any
time you want.
Web-based products are a ‘green’ form of
reporting that is secure and convenient for
companies that want to go paperless. ESS allows employees to log into a secure Web site
and download their pay stubs and see their
payroll history at their own convenience.
Web-based payroll entry combined with ESS,
direct deposit and payroll debit cards enable
companies and employees to become much
more efficient and focused. When you out-source payroll, the only task you must perform is turning the weekly or biweekly information over to the vendor to process. With
Web-based programs, you can do this on the
road, while on vacation, traveling for business, or from the convenience of home.