Your business has grown, and with that growth come both opportunities and growing pains. As you identify what’s next for your organization, one thing is clear — you could use some help. When you need assistance in multiple areas, cyclical yet complex administrative functions like payroll are a great place to start.
Outsourcing payroll can yield a lot of benefits, ranging from regained time to greater expertise and increased simplicity. With a partner in payroll, you can also improve your employee experience and reduce risk. But before you rely on a Google search of popular providers, think about what questions to ask potential partners.
1. What Services Can I Choose From?
The concept of payroll providers isn’t new, but that doesn’t mean they’re all the same. While some focus on large organizations, others are better suited for smaller operations like startups and small businesses. Global payroll services can provide a large suite of options that align with today’s remote and hybrid workforces.
When you’re considering a move to an outside payroll vendor, it’s important to be clear as to what you need. Without a detailed list of requirements, you’ll be overwhelmed by all the options. Consider the types of employees you have, payroll frequency, and unique factors about your industry as you develop your list.
2. Who Handles Taxes and Deductions?
A tax error likely tops the list of many business leaders’ rotating nightmares. A simple slip-up while withholding state and local taxes can be devastating for employees and companies. And if not resolved quickly, such errors can easily compound.
Getting a good grasp of who’s responsible for taxes and deductions should top your list of vetting questions. Beyond just deducting from employees’ paychecks, define who will send the deducted amounts to the proper entities. Get a clear idea of the flow of cash into and out of your payroll vendor.
3. Can They Handle Domestic and International Employees?
If your company has any desire to grow beyond a domestic footprint, it’s a good idea to look at global payroll providers. There are dynamic and often confusing rules for global employment, making it a challenge to get broad expertise in-house. Thankfully, payroll providers that specialize in global hiring and regulations exist to fill this gap.
Some providers can serve as an employer of record, which means they hire employees on your behalf. This strategy places the responsibility of navigating country-specific rules on the payroll provider, instead of your company. For businesses, this can free up time and liability as you hire global talent or offer remote work options.
4. Do They Provide Full-Time and Contractor Payroll Management?
Sometimes, you need to hire talent for a fixed-duration project. Contract work can fill in the gaps created by employee departures, medical or family leaves, or specific skill needs. Other times, you need a full-time employee to backfill an open role or to fill a new one. Find out whether your potential payroll provider can handle multiple employee types. If they can, learn what kind specifically so you can determine whether your needs and their solutions are a match.
Even if you currently have only full-time employees, don’t discount the possibility of needing contract workers. With more families moving for opportunities to work or explore, it’s possible that even a full-time employee may change statuses. If your comptroller and her family decide that a year-long road trip is in the cards, what do you do? With the option to transition her to contractor status, she can stay on staff, and you’ll retain an essential employee.
5. Who’s Responsible for Managing International Compliance and Regulatory Requirements?
Even the most competent legal team will prickle at the thought of managing complex, country-specific rules. Unfortunately, distaste doesn’t make them cease to exist, but offloading the responsibility can lessen the heartburn of complexity. For companies offering or considering remote options, global payroll providers can provide a win-win solution thanks to specific expertise. While your HR team may understand domestic rules, adding scores of countries’ regulations can pose an insurmountable task.
If your new database administrator has plans to follow their partner’s military assignments, you’ll quickly run into complexity. Military base selections are often assigned, so ensuring your ability to flex with employee needs is a smart move. Plus, you’ll transfer liability for compliance and regulatory rules to your provider, which has the needed expertise.
Finding a Payroll Partner You Can Trust
In business and life, trust is everything. Understanding the suite of services available, which ones your business needs, and who’s accountable for what is essential. Outline the contract expectations clearly, working with your legal team to ensure all parties understand the agreement.
Review the contract line by line if you need to, and ask about the onboarding process for new account relationships. Ideally, your relationship with your payroll provider will be long-term, so getting off on the right foot is important. Develop a set of service-line agreements that can be measured and assessed quarterly to ensure everyone is meeting expectations. Now that you’ve taken the time to research, select, and outsource payroll, you can get back to running your business.