5 Tips To Pick Outsourced Payroll Providers Like A Pro

Is manual work holding you back? If payroll tasks overwhelm you, you are not alone.

Managing payroll can be time-consuming and error-prone, with a mistake causing a serious problem. For example, if you miss a submission deadline, you can face government penalties for it!

The good news? Outsourced payroll providers are ready to help, so you don’t have to do it all yourself.

Here, we share 5 practical tips and a step-by-step guide to choosing the best-fitted system. From there, you can discover the one that fits your business needs today and scales with you tomorrow.

1. Assess Your Business

Before engaging with outsourced payroll providers, take stock of where your business is now and where it’s heading.

What stage is your business at?

Are you starting or expanding across markets? Knowing where your business is at helps you find the services that match your progress and growth. Startups often need basic payroll services and a quick setup. Meanwhile, scaling companies seek automation and integration with HR, benefits, and compliance.

(If you are planning to start a company, we have a guide on How to Incorporate a Company in Singapore.)

What are your business goals?

Are you aiming for local stability, rapid expansion, or restructuring for investment? If you have global hiring plans, consider providers with global or regional payroll expertise. They have experience in cross-border regulations, simplifying your company’s compliance duties.

What are your strengths and limitations?

Take a look at your current team’s payroll and finance know-how. Do you have the expertise? Are you facing regulatory pains like CPF and IRAS filings? A fully managed service may be the key. Then, decide if you want your provider to handle compliance end-to-end or act as support.

How’s your risk appetite?

Some companies prefer close control to minimise risks. Others seek to offload payroll compliance and operational risks. Understand what peace of mind means for you and seek out outsourced payroll providers who meet that preference.

2. Assess Your Manpower And Workload

Ask yourself: Who is handling payroll now, and are they at risk of burnout or leaving? These questions can help you gauge your manpower and workload.

Do you want payroll managed internally or externally?

Think about flexibility. Some providers let you switch between internal and outsourced payroll as your company evolves.

Do you have someone managing payroll?

Is your payroll managed by one person or a team? One-person payroll teams pose a key person risk, namely, overwork or resignation. Hence, outsourcing lightens the baggage and ensures continuity even after someone leaves.

Other important considerations:

• Confidentiality: Will outsourcing improve or compromise your payroll data privacy? Choose providers with strong security measures and relevant certifications.
• Scalability: Can the provider scale up or down as your workforce size changes? Agility is crucial during growth or seasonal shifts.

3. Assess Your Budget And Technology

Payroll is more than cutting payslips. It is also about how your system handles payments, filings, bonuses, CPF, and tax reporting. So, take a look at how your company tackles it:

How do you currently manage payroll?

Are you managing it manually with spreadsheets, or have you automated it via cloud SaaS? Providers who automate CPF, bonuses, claims, and regulatory updates help cut errors and compliance risks. If you have cloud software, great! Remember to make sure it can integrate with your platform.

What payroll tools do you have or need?

Think about what you want to integrate into your current system. It could be HR, leave, attendance tracking, or even accounting software. Moreover, remote and distributed workforces are heavily relying on smartphones for their tasks. So, mobile access, like pay slips and notifications, is also important.

[More readings: Complete Guide To Payroll Services: What, How, and Why] 

How much can you spend on outsourced payroll providers?

When allocating your budget, be wary of hidden fees, like

• Monthly service fees
• Per-employee charges
• Setup costs
• Compliance support

Choose outsourced payroll providers with clear Service Level Agreements (SLAs) and transparent pricing.

4. Assess Your Timeline

After looking into your budget and operations, create a timeline for yourself. Inside, include your live date, training and backup plans.

When do you need payroll services live?

Buffer time for data migration, system testing, and adjustments beyond the go-live date. You will also need time to fix any bugs or errors that appear during the testing phase.

Does your team need training?

Some outsourced payroll providers offer new users virtual or on-site training sessions on the services they provide. If not, you may need to inquire further and possibly pay extra for the added service. During the session, ask your provider about help desks and knowledge bases for ongoing support.

Do you have a backup plan?

Having one reduces damage and helps you get back on track whenever emergencies happen. So, check with your provider for

• Emergency support protocols
• Error handling
• How easily can you switch back to internal or another provider

5. Choose Your Top 5 Outsourced Payroll Providers

Now, you are ready to compare and filter out your options! In this section, we prepared a table of things to consider for your reference.

6. Lastly, Reach Out To Oursourced Payroll Providers!

Before contacting providers, prepare a clear list of must-haves and nice-to-haves. You can also

• Ask for a free demo or pilot run.
• Review their error resolution processes and communication timelines.
• Ask if a dedicated payroll manager will be assigned to you.

If you are unsure, providers like Singapore Corporate Services (SCS) offer consultations to help small businesses. Our 30-minute sessions help assess or realign your needs and strategise your first steps.

Disclaimer: The information provided in this article is intended for general guidance only and reflects regulations as of the publication date. Given that compliance requirements, processes, and fees may change over time, readers are advised to consult official sources such as ACRA for the most up-to-date information or seek professional guidance from our team.

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