Key reasons to outsource your payroll
CRS Technologies General Manager Ian McAlister offers his perspective and considerations related to this payroll management strategy.
Managing payroll involves more than just paying employees. There’s a lot that needs to be done before the payroll can be processed and it is a meticulous and often complex scenario that demands constant attention – one of the main reasons it’s best left to the experts and why many companies are opting for the outsource option, says Ian McAlister, General Manager, CRS Technologies.
McAlister says outsourcing is gaining traction in the market as a primary way to handle the realities of modern payroll management, and the list of boxes that needs to be ticked is extensive.
It includes gathering the relevant employee information (and maintaining it to ensure that it is always up to date), calculating salaries and any overtime pay due, managing deductions for medical aid, provident/pension fund and unemployment insurance fund contributions, as well as calculating pay as you earn amounts to be paid over to the South African Revenue Service (SARS).
“Only when all this is done can salaries be paid and payslips distributed,” says McAlister.
Managing payroll is a time-consuming task. According to Technology Advice, 26% of small businesses spend three-to-five hours a month processing their payroll manually.
In addition to the myriad tasks involved in payroll management, there are also numerous legal requirements to comply with, which increases the chance of making potentially costly mistakes.
“Consequently, many companies prefer to outsource the management of their organisation’s payroll to a payroll bureau. This enables them to improve efficiency, reduce operating expenses and alleviate risk, all of which gives them the peace of mind to focus on the core business activities and strategic tasks that are essential for the growth of the business,” adds McAlister.
What is a payroll bureau?
CRS Technologies has entrenched its position as a recognised specialist services and solutions provider within the human capital management market, with an established payroll bureau.
As McAlister explains, this is an accounting service provider that provides outsourced payroll services to other businesses.
“A payroll bureau acts on behalf of these businesses to SARS, providing the tax collection authority with information it requires, and also receiving and acting on information from SARS relevant to those businesses. It is also a source of professional expertise for its clients, which means they don’t have to employ their own in-house payroll specialist and can contact the payroll bureau whenever they have a query.
What does a payroll bureau do?
One of the main reasons the payroll bureau has gained prominence in the fields of human resources and payroll is because businesses have the benefit of an immediate, dedicated team that is ‘always-on’ and always ready to help.
The CRS Technologies payroll bureau comprises a dedicated team of payroll consultants and administrators who provide an extensive spectrum of services to businesses that are integral to keeping businesses healthy. These include:
- Generating pay runs (weekly, fortnightly or monthly);
- Calculating benefits and reimbursements;
- Making deductions such as medical aid and pension/provident fund contributions;
- Ensuring the electronic payment of salaries with accompanying security-sealed payslips;
- Producing standard payroll reports;
- Processing employee tax certificates;
- Supervising statutory submissions; and
- Submitting annual reconciliations.
McAlister says that while any business could potentially employ the services of a payroll bureau, the typical client is a small business: “One that is just big enough for its payroll to be an inconvenience, but also too small to justify managing its payroll in-house.”
This is because there is a clear business justification case in selecting a payroll bureau to manage payroll.
“There are many reasons why businesses prefer to use the services of an outsourced payroll services provider, but perhaps the biggest reason is that they do not want the bother and inconvenience of payroll. They do not want frustrated employees every time pay day comes around. Instead they want accuracy and reliability, as well as someone to consult with if they have any queries. They also want to avoid incurring severe fines and penalties from SARS owing to non-compliance.”
Outsourcing the payroll function to a payroll bureau holds many other advantages. Have a look at this article about the top reasons to hire a payroll services company.
Choosing the best payroll bureau
With so many outsourced payroll services providers available in the market, how do you go about finding the one that’s right for your business?
“The human resources and payroll discipline is absolutely crucial for effective operations of any business,” says McAlister. “You cannot entrust this to just any third party or service provider. There are several qualities to consider when choosing a payroll services provider, but certain attributes should be at the top of your list.” Click here to read more about these.
Using the services of a payroll bureau provides businesses with a hassle-free solution regarding the management of their payrolls. Paying employees accurately on time, every time is crucial to the success of any business, regardless of its size.”
CRS Technologies emphasises that governance and risk management is also a major consideration. Outsourcing to a specialist entrusts the company’s risk management profile and governance strategy to those in the know. It removes the burden of compliance and concern over risk.
In a market that is characterised by digitalisation, continued adoption of cloud, AI, robotics, machine learning and big data analysis, to be able to securely and effectively automate human resources and payroll – and leave the burden and the responsibility with a credible payroll bureau – makes perfect sense.