Payroll is often thought of as a back office task that is taken care of by accounts or HR. While payroll may not be attached to a profit generating centre, it is in fact one of the most important functions in any company.
Your hardworking employees are the most valuable asset in the business, so when they are paid compliantly, on time and with no errors, it ensures they are rewarded, happy, motivated and willing to put in the effort for their daily duties. Getting payroll wrong can have financial and reputational consequences for your business.
Having the right payroll software providing the features and reporting required for your business is crucial, but there is a huge risk hiding in plain sight that you can not ignore – It is called ’key person dependency risk’.
This is defined as the key person in your business whose knowledge and skills are critical to the viability, growth and success of the organisation, and whose loss may cripple it.
More often than not our clients are telling us that the payroll in their business is processed by one person, they have been doing it for many many years and in fact, nobody else knows how to do it well, or even at all!
For larger organisations this may not be a problem as there are typically multiple-head payroll teams, however for many Aussie SME’s we know that this is a serious concern.
What happens if your payroll person suddenly quits? They retire or unexpectedly leave the business? Who will pay your employees tomorrow? Do you know the passwords and logins to your systems? Do you know the specific conditions and nuances of your pay cycles? And more importantly, are you aware of the compliance and reporting requirements for your business?
Document processes and train staff
One way to protect this major risk is to very clearly document the payroll process and to upskill and train others in the business on how to process pay cycles. This doesn’t have to be someone in HR or Accounts, more an emergency contact to ensure payroll is never in doubt of being processed.
Outsource to a managed payroll provider
Another option to consider is outsourcing the payroll function entirely to a professional organisation who will ensure things are done on time, every time and at the highest standards. So why else would you consider outsourcing your payroll?
Below are 4 key reasons many Australian SME’s have made the switch to an outsourced solution:
- Remove Risk – It removes Key Person risk in the business as you are typically allocated a dedicated payroll officer (with a back up team behind them) who will become very familiar with your business, its people and the details of your payroll.
- Save Time – Having the right provider and technology will automate a lot of the process and will save you time on things like payroll admin, double data entry, processing errors, and of course the time spent processing each pay run.
- Save Money – An outsourced payroll solution is more affordable than you think and in fact it can actually save you money. If you compare the cost of a full time accounts/payroll officers salary versus the costs for a Payroll Service, you will find there is a huge ROI and cost saving by outsourcing to the experts.
- Compliance – A huge focus of Fair Work is payroll compliance. Managing your obligations manually give rise to potentially costly errors. Particularly as the Award system and Enterprise Agreements can be so complicated, you really need experts who leverage market leading technology to ensure compliance is guaranteed on each and every pay-run.
In summary, outsourcing your payroll not only saves you money and ensures compliance but ensures staff are always paid on time and in the most efficient way. It’s a great solution to future proof your organisation from any potential risks, all whilst adding expert knowledge and allowing you to focus on your core business.
Employment Innovations’ outsourced payroll service provides businesses with access to dedicated payroll officers who are backed by a team of HR and Legal experts. Speak with one of our consultants to see how an outsourced payroll service can provide cost and time savings to your business along with removing the risk of non-compliance. Phone 1300144120 or contact us today.