Businesses are often finding themselves subscribed to a number of different solutions for accounting, rostering, HR and payroll – or perhaps only using the basic payroll features within their existing accounting suite and therefore not gaining any additional value from product features that exist today in leading payroll and HR software systems.

Any change in technology also adds to implementation and training costs for your staff if running payroll internally – and the resistance to change is also greater.

Risks that need to be managed relate to security, fraud and key person loss. Payroll fraud costs businesses a lot of money and can arise in a number of different creative ways such as ghosting, inflating time or rates and redirecting funds.

Sensitive processes such as payroll management are procedures that add significant weight to a single person or team of people that already have their hands full. When you outsource payroll, it frees up your time to focus on the other responsibilities that come with running a business.

In addition to the costs associated with maintaining in-house payroll software, you also have the cost of financing in-house payroll resources (salaries and on-costs), ongoing training, administrative overheads and recruitment costs.

The latest payroll benchmarking report discovered that it costs the average business with under 200 employees $36.30 per payslip* to manage payroll in-house. Small businesses can save up to 75% of their payroll overhead costs** by outsourcing their payroll

*  Payroll Benchmarking Reports 2017 & 2018, Australian Payroll Association.
** Comparing the average cost per payslip for a fortnightly in-house payroll function for a business with less than 200 employees (Payroll Benchmarking Report 2018, Australian Payroll Association) with Employment Innovation’s outsourced payroll solution.

There are typically only 3 things that contribute to errors in the payroll process – people, processes and technology. Highly skilled payroll professionals are very hard to attract and retain in Australia – they are in high demand. Most payroll mistakes are made because the person processing payroll lacks knowledge, skills and training.

Symptoms of poor payroll processes and systems that need improving include:

• Employees and managers complain of errors and delays;
• There is a significant amount of manual work involved;
• Information is not easily accessible, and reporting does not provide any valuable insights; and
• Frequent off-cycle payments are being made to fix errors.

If your payroll processes display any of these symptoms, it may be time to think about outsourcing your payroll. You can complete a self-service health check using Employment Innovations resources.

In 2018, it is estimated that 24.7% of all Australian businesses and 37.8% of Australian SMEs with less than 200 employees are now operating under an outsourced payroll model, up from 21.3% and 28% respectively in 2017*.

Choosing the right outsourced payroll provider for your business comes down to a few critical factors:

• Expertise;
• Proven track record;
• Compliance focus;
• Technology and features;
• Reporting capabilities;
• Integration options;
• Access to services that drive long term partnerships and expansion with your business.

If you’re looking to partner with a payroll service, find out more about the questions you should be asking your potential payroll partner.