So you’ve made the decision to outsource your payroll. You’ve done the calculations and weighed your options. You’ve therefore decided that you’re ready to save time and money, reduce administrative tasks, and lower the risk of costly penalties.
But beware - even though the need to outsource payroll may be clear, and the benefits might be readily apparent, there are still some common pitfalls that it pays to avoid:
Keep reading to learn the details of each potential pitfall - and see how best to overcome them.
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The most common pitfall that traps companies when they decide to outsource their payroll is simply paying too much. The good news, however, is that outsourcing payroll may be more affordable than you think.
According to expertmarket.com, you can expect to pay anywhere from $20 to $149 a month, plus a fee per employee of around $4 to $12, which means your monthly costs can fluctuate.
There may also be additional costs depending on what additional services you need, including:
While there’s no such thing as a free lunch in the world of payroll outsourcing, there are ways to lower your expenses.
The key is to make sure your provider is transparent about their pricing and that you know exactly what you’re paying for. Hidden extra costs can and will add up quickly!
Deposits disappearing completely is the ultimate payroll nightmare. But in the unlikely situation that a payroll company goes out of business, it can happen.
Some smaller payroll providers may not have enough reserved funds to cover the entire cash flow of a processing period.
This isn’t a problem when funds flow seamlessly from clients, but it’s potentially a massive problem if there are accounting mistakes or the business closes unexpectedly.
The most important thing you can do to avoid this pitfall is to find a payroll partner with a tried and tested history. Check with peers, industry associations, or business and industry news outlets you belong to for referrals.
When you’re reviewing providers, find out how long they’ve been in business. Ask how many clients they have and have a look at their retention rate. Find out if they’ll give you client references you can speak to.
It all comes down to finding a partner that has the payroll experience as well as the credibility to give you the peace of mind you need.
Like a lot of companies, you probably use at least one HR or financial software application to help you handle employee management. You may even use multiple programs for things like employee records or pay and benefits.
If that’s the case, it’s always possible that your systems won’t pair with a payroll provider’s platform or that you’ll have to make an enormous investment just to get your systems to talk to your partner’s.
To avoid this pitfall, ask potential partners how they’ll handle the transition and if you’ll have a dedicated team devoted to getting you set up and running.
Any such team should be available to walk you through the first few payrolls to make sure things run smoothly. You’ll also want to make sure you have ongoing support in case you have any problems.
Any payroll partner worth their salt understands the need for seamless integration and will work with you to ensure a smooth implementation.
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Given the number of headline-making security breaches in recent years, it’s completely understandable to worry about placing sensitive employee data in someone else’s hands.
Even though data security breaches are rare, they can still cause some companies to consider keeping payroll in-house.
When you’re shopping for a payroll provider, you’ll want to make sure they’re reputable and have policies and procedures in place to protect your data.
Some questions you’ll want to ask may include:
If you can get sound answers to these questions, you should be able to sleep soundly knowing your data is in good hands!
Let’s face it - no payroll partner is ever perfect. But here at Symmetrical, we’re fully aware of the most common roadblocks when it comes to outsourcing payroll, and we built our solutions to overcome them.
We constantly scrutinize our solutions and services to make sure they are:
If you decide to outsource your payroll to us, we know you want it to be a problem-free experience. Our goal is to make sure that happens!
Talk to us about your payroll issues
About Symmetrical.ai
Symmetrical is the first payroll solution you won’t hate. We enable fast-paced companies to onboard at scale and run their payroll invisibly. To run your payroll hassle-free, contact our experts to learn more!
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