Payroll isn’t the type of business function that gets people excited even though it’s an essential part of business management. Unless someone isn’t paid on time or there’s a mistake on the payslip, employees hardly ever consider what goes into management of the payroll.
Pay an employee late and the first person to be harassed is the overworked payroll or accounting officer. Sorting out the mess of late payments can take hours to days and employers quickly lose credibility with employees once mistakes on payslips are made.
Studies have shown that even with all the benefits a company can offer its employees, the best incentive for loyalty is still on-time and correct payments of salaries. Not only permanent employees, but also contract workers take the issue of accurate payslips and on-time payment seriously.
You cannot really blame the employees since they have debit orders to honour and even one oversight can cause employees to get bad credit records. A note from the employer stating that it was their fault will not make the landlord or bank happy. As such employers, even the smallest ones, have a responsibility to manage the monthly and weekly payroll effectively.
Apart from the above, there are also the legal rights of employees and contract workers to be paid on agreed dates, time and the manner stipulated in their employment or service contracts. A slip-up with salary slips can be forgiven once, but if such should occur on a regular basis, employees may decide to pursue the issue through labour or trade unions.
Cost of Monthly Payroll
Apart from the risk of late payment or incorrect payslip information, employers need to consider the actual payroll management cost. Studies have shown that over 50% of employers don’t accurately measure the cost of payroll administration.
Smaller businesses often don’t employ extra people to manage the function. The business owner manages the salary role as well. This, of course, means that should the business owner be on vacation or caught up in meetings that employees may have to wait for their money. Mistakes on the salary slips then become a regular issue and the business owner also loses credibility with employees.
With the slightly larger businesses, one person may be appointed to manage the function. In this instance the business has to carry the costs of another employee on the payroll. The employee may go on leave, and with nobody to look after on-time salary payments the same scenario unfolds as with the business owner in charge.
Where the business has two or three persons involved in payroll management, the costs often become too high. When the cost and risks of in-house payroll management are considered, one has to agree that outsourcing weekly and monthly management thereof makes sense.
With the above risks and costs in mind, more and more businesses, irrespective of their size, now outsource the function completely. They save in terms of:
The businesses that outsource the function also benefit from:
What Outsourcing Entails
Outsourcing the function doesn’t mean having to give up control over salary payments. Companies stay in control of their HR and Finance functions, but instead of having to manage such in-house they have external experts handling the tasks associated with salaries. With flexible options available, companies can decide how much of the overall function should be outsourced.
Affordability of the Service
A common misconception among business owners is that monthly payroll services are too expensive for their budgets. Once the business owners accurately measure the total cost of in-house management, they soon realise that the services are exceptionally affordable.
OfficeOnCall to the Rescue
Whether you only have a few employees on your payroll or have a complex system of contract workers, casual labourers and permanent employees, you’ll benefit from our flexible monthly payroll services. We ensure full compliance with the labour and tax regulations and on-time payments. With accurate record keeping and streamlining of the function we help you to save money and stay labour law and tax compliant.