In many SMEs the payroll ‘department' is often the person delegated to deal with the accounts or the person who drew the short straw. But what happens if they become absent? The knowledge to get your staff paid remains with them and running your payroll becomes a headache the business could well do without, not least of which your staff may in extreme circumstances not get paid. It just doesn't bear thinking about.
Many larger organisations have made provision for a disaster recovery contingency and these are generally designed to cover unexpected non-availability of infrastructure. A much more likely and potentially more debilitating situation is where there is a loss of skilled personnel, either planned such as maternity leave or unplanned sickness and death. Many of these crises can be protracted in nature and devastating in their effect on an organisations ability to produce a payroll.
The ‘insurance' against such events can be to either fully outsource your payroll or merely arrange a business continuity arrangement with a payroll bureau, which is able to, often at very short notice, step in to pick up the payroll processing responsibilities.
A payroll manager will interview payroll staff and produce a documented plan for use both by the provider and the client. For the client it will document the procedures to invoke when business continuity may be required. It will list all contacts and escalation points. These will be available around the clock. For the provider it will document the entire payroll operation procedure which would be invoked.
When the client needs to invoke these procedures they will contact their nominated contact and request the appropriate level of intervention. For emergency cover (i.e. less than 24 hours' notice) there will be an agreed payroll procedure and charging system. For planned intervention (e.g. maternity and scheduled sickness), full payroll processing will be implemented and charged at normal bureau rates.
However, in looking at business continuity as an option, the obvious alternative is to remove the processing requirements completely from your business and to simply outsource the function. In reviewing whether this is suitable, there are a few key questions that need to be asked:
- Are you a small business that has no desire or resources to get involved with payroll?
- Is the one person running your payroll leaving or has left suddenly?
- Do you wish to ensure you remain compliant with all payroll legislation?
- Do you wish to reduce cost of processing payroll and supporting systems?
- Is your business growing and you need a scalable solution?
If the answer to one or all of the above is yes, then outsourcing may be the solution to protect your payroll administration.
The key benefits to an organisation of outsourcing to a professional and experienced bureau are fundamentally about saving time and money. This is created through developing trust and an effective on-going working relationship with your chosen bureau, they are after all your payroll department.
It is important where possible to meet your payroll bureau and so you can be confident of their ability to not only keep their promises but also be the type of organisation you can work with.
The service commitment and flexibility of pricing are key indicators of a successful bureau and one that you should feel happy engaging with, the staff should be payroll qualified and able to provide customer testimonials upon request.
Whichever route you choose to safeguard your payroll processing the advantages to your business will be felt either with piece of mind or a more professional, knowledgeable and complete payroll service.
Matt Carter is operations manager at Bond International Software. For more information visit www.bondmanagedservices.co.uk