Why is it important to find the best outsourced payroll provider?

Payroll outsourcing

Payroll outsourcing is a beneficial process for large, small, and medium-sized companies. However, these benefits can be obtained only through the choice of the best provider of this service. It is of the utmost importance that the contracted organization meets all the expectations and requirements of your company.

In this article, we will list the features that a good payroll provider should offer for you to get the best results. Likewise, you will learn about the risks that a bad choice involves and that can cause inconvenience for your employees and company.

1. What is payroll outsourcing?

2. What is a payroll service provider?

3. How can you choose the best payroll outsourcing provider?

4. Risks of payroll outsourcing and how to avoid them

5. How can PEO Middle East help you learn about payroll outsourcing?

1. What is payroll outsourcing?

With payroll outsourcing, a company hires a third party to handle payroll-related activities. Also, businesses often outsource this process to save time and cost, as well as other benefits. They can also eliminate the need to hire and train an entire team to perform these tasks.

Likewise, it avoids having to purchase software to perform these functions, with the addition of maintenance costs. It guarantees to remain in constant compliance with the regulations and laws of the country where these services are outsourced. 

2. What is a payroll service provider?

Payroll outsourcing companies in the UAE offer their services to carry out this process for your company. In this way, businesses that need it, and that do not have the knowledge or experience, can rely on these providers. Also, with the hiring of these professionals, you will save resources to use in other important activities (growth and expansion).

2.1 What do payroll providers do?

The processing of payroll in a company includes a variety of activities that can be complex on their own. However, a payroll provider can perform the tasks involved in it efficiently and securely. Commonly, companies that offer payroll outsourcing in Libya, or other Middle Eastern countries, handle the following processes:

  • Calculation and payment of the salary of your employees.
  • Make the corresponding deductions.
  • Withhold income tax.
  • Calculate and pay payroll taxes, as well as mandatory employer contributions.
  • Manage sick leave or other types of leave.
  • Maintain payroll records.
  • Prepare and present detailed reports.
  • Offer integrated software solutions.

In the same way, you can find a provider that offers outsourced services individually or also in a more complete way. Nevertheless, in certain countries, local laws may not allow a vendor to pay their employees for you. However, payroll outsourcing companies in the UAE and Libya can pay their workers without any inconvenience. 

3. How can you choose the best payroll outsourcing provider?

Whether you are hiring a provider for the first time or switching to a new one, there are a few things to consider. For example, for the hiring or change to be successful, you have to have a provider that meets your needs. Also, consider the following aspects:

3.1 When to hire or change providers

The preliminary matter of deciding on the payroll provider or when changing providers is to decide at what specific time to do it. In this sense, you can choose either to do it mid-year or at the end of it. In the first case, it is a good idea to convert in the second quarter.

On the other hand, if you decide to do it at the end of the year, opt for the beginning of the last quarter. Of course, this is not a mandatory requirement, as a good provider handles payroll smoothly at any time. Therefore, by getting an easy implementation process, you can ensure a smooth transition for your business.

Also, you should work with an experienced provider as they can better understand your business needs. Likewise, the team of specialists must be able to carry out an accompaniment at each step of the transition to simplify the process.

3.2 Unified system

The provider of payroll outsourcing in Libya, for example, must be able to provide a unified system with Human Resources. With a database that integrates HR, payroll, and time tracking you get many more benefits, including:

  • Flexibility for the user.
  • Elimination of duplicate data.
  • Significant reduction of payroll errors.
  • Decreased operating costs.

Look for a vendor who can suggest improvements to increase productivity, reduce costs, and reduce errors. In addition, the provider must meet the unique requirements of your business, and fit into your business structure.

3.3 Information integration

Another important aspect of payroll outsourcing is having a provider that can integrate all the systems. In this way, you can obtain accurate data and timely reports for the benefit of your business. Likewise, you can enjoy other advantages such as reduced paperwork.

The vendor must be able to provide integration with the most common and powerful business applications. In addition, a good payroll provider offers personalized services according to the systems you already have in your company.

3.4 Compliance with local laws

To avoid inconveniences, companies that have employees in other countries must comply with labor regulations. The best payroll outsourcing companies in the UAE can keep your business in full compliance with regulations. Furthermore, the provider should assist in updating the tax tables and processing them.

In this sense, they must also review their information in search of errors or inconsistencies in taxes. In addition, the contracted organization will handle returns and perform tax payments and year-end processing.

3.5 Ease of data transfer

When moving from internal to contracted payroll or a new provider, moving data should be easy. Therefore, you must be able to do it accurately, making sure of the following:

  1. Transfer the information obtained from the beginning of the year to the date.
  2. Evaluate payroll compliance so far.
  3. Validate the payroll by running it in parallel with that of the provider and check that everything is correct.

Therefore, choose the provider that can offer you facilities to successfully carry out the implementation process.

3.6 Level of customer service

Consider it important to determine the level of customer service that the company of payroll outsourcing in Libya, for example, offers. In this way, you can feel confident that you are getting the care you need to make the partnership a success. To certify that you will get the care and interaction you need from the provider, verify that:

  1. The support staff has all necessary payroll certifications.
  2. This same staff has the necessary disposition to assist you by phone, chat, or email.
  3. You will receive an account manager and a trained work team.
  4. The response time when requesting advice for any questions.

All these aspects should be consulted with the companies that offer you payroll outsourcing services. In addition, you must have a company by your side that is capable of creating plans for training and implementation. 

4. Risks of payroll outsourcing and how to avoid them

When you plan to outsource your payroll to an expert provider, you may face certain risks in the process. However, you can prevent them by following these recommendations:

4.1 Risks of outsourcing

Among the risks that a company may face when outsourcing payroll services are:

4.1.1 Choosing a company without the necessary considerations

Your company needs to be clear about your hiring goals so you do not get a poor contract from a supplier. Therefore, the association with the organization that provides the service will not cover the real needs of your business.

4.1.2 Failure to comply with legal responsibilities

Even though you have outsourced your payroll, you still need to meet the legal responsibilities of your business. Therefore, you must ensure that you maintain constant contact with the supplier that you have chosen to work with you. Also, know the responsibilities of each of the parties to maintain legal compliance.

4.1.3 Incomplete transfer of information

A latent risk at the time of the implementation of the association with the provider is a bad transfer of data. If this process is incomplete, the payroll outsourcing organization will not be able to complete the task properly. In addition, if you add poor access to data to this situation, the provision of the service will be defective. 

4.1.4 Interruption of the interim payroll function

The loss of payroll staff at the time of service implementation may negatively affect provisional payroll. In the same way, it may be that in the long term it can disturb the productivity of the payroll department. Therefore, it is of the utmost importance that all parties agree to the outsourcing contract.

4.1.5 Lost relationships with staff

Employees could become dissatisfied with the loss of personal relationships. Thus, you need to know the expectations of the employees and how payroll will be handled with this new way of processing it.

4.2 Prevent the risks of payroll outsourcing

You already know the possible HR challenges that you could face when hiring one of the many payroll outsourcing companies in the UAE. Therefore, you will then be able to see how to avoid these risks.

4.2.1 Secure data transfer

The transfer of data from your company to the provider must meet the following characteristics: speed, efficiency, and accuracy. Otherwise, you will have a delay in the processing and execution of the payroll of your company. In addition, the transition process can become more expensive, as well as take more time than necessary.

4.2.2 Partner your business with a provider that eases the transition

Transitioning from an in-house payroll process to outsourcing requires you to use the necessary internal resources. You should maintain a joint working relationship with your provider to make the transition smooth. Moreover, there must be clarity regarding the tasks for which each of the parties is responsible.

4.2.3 Communication is key

For the relationship with the chosen supplier to be successful, communication must be regular, precise, and consistent. However, maintaining these communicative characteristics requires a sustained effort on the part of the participants.

4.2.4 Adequate management of services

The management process for implementation must be well-defined, with clear and simple rules. Communication is also key here, so the channels for this purpose must be open at all times. Establish the characteristics of the work and how it will be carried out with the new method for processing your payroll.

5. How can PEO Middle East help you learn about payroll outsourcing?

Payroll outsourcing allows your company to save both money and time in this complex process. Although outsourcing is generally a much more profitable process, you need to have the right supplier. Otherwise, you are prone to risks that can cause compliance problems, or even having to find another provider.

However, on PEO Middle East, and with our extensive and certified experience, your payroll will be in the hands of professionals trained in this area. Not only this, but we also offer you the best employee hiring services through our PEO.

Creating stories of success for companies is what we do. If you are based in any of the following locations, you can request your solutions at any time:

Learn more about outsourcing the payroll process of your company with us. Simply contact us by calling our team at +971 43 316 688 where we will offer you a solution that suits your requirements. Likewise, we are also at your disposal for inquiries and more at [email protected].

The opportunity to belong in the best companies of the Middle East is just a few clicks away on thetalentpoint.com. In the same way, you can start applying for the job of your dreams by sending your resume to [email protected].

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