More and more organizations are choosing to outsource the payroll function in order to save time, be more compliant and reduce the risk of errors. But for many, outsourcing for the first time can be a challenging process. Businesses are often uncertain of what to expect and what their responsibilities will be.
What is the provider’s responsibility to me?
On the most basic level, payroll companies can be expected to provide the following services:
* Cutting checks and initiating direct deposit payments
* Managing new hire filing
* Calculating and paying taxes
* Assuming payroll tax liability (except in the case of client error)
* Preparing tax returns
* Performing reconciliations
In addition to these, exceptional payroll companies will provide:
* Easy-to-use, web-based software for payroll management and HR
* Thorough implementation and testing of the new system to ensure it suits your needs
* Interactive online and/or in-person training sessions
* Personalized client service (not call centers or automated messages)
* Assistance with compliance matters
* Efficiency gains and cost savings through better, more streamlined processes
* Ongoing updates to the software based on user feedback
* Continuing education and thought leadership on top industry issues
What is my responsibility to the provider?
Service providers can only do so much—as a client, you will have responsibilities to them as well. For instance, how can a payroll company generate an accurate W-2 if an employee’s Social Security number was entered into the system incorrectly? You will get more out of your relationship with the provider if you take the following responsibilities to heart. As a client, you will be expected to:
* Take the time to learn the solutions using the training materials
* Provide reports and information for setup and implementation
* Train employees on the new system, if applicable
* Enter accurate information into the system
* Report hours and payments accurately
* Enter new hires into the system
* Disburse checks and reports to appropriate individuals
* Provide accurate and correct tax information when needed
* Be responsive if questions arise
If you take your responsibilities as a client seriously, your organization will reap the benefits. Likewise, your provider should take their responsibilities just as seriously—if they do not, it may be time to find a provider that will.
Have more questions about what to look for in an HR and payroll provider? Download this buyer’s guide to learn about the most important criteria, and you will feel confident in your knowledge as you go through this process.
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