Outsourcing a payroll checklist

Outsourcing the payroll function could free up your time to concentrate on other things. What factors do you need to consider when choosing and working with an external payroll services provider?

Searching questions

Use our Outsourcing A Payroll Checklist to ask some searching questions of a potential payroll service provider.

To ensure you get what you need, put a service level agreement (SLA) in place as one of the conditions of the contract. This should set out exactly what you expect from the payroll service provider:

• the accuracy level you expect each time a payroll is processed and the key performance indicators
• the deadlines for input (e.g. for timesheets/payroll information to be provided to payroll provider) and outputs (e.g. payslips and reports to be provided to the company)
• confirmation of the first point of contact for employee queries
• details on who is authorised to request a payslip re-working and the turnaround time, as well as details of those who are authorised to request reprints of outputs or the creation of new reports
• the archiving and document retention routines to be employed
• details on communication routines for system downtime and software errors.

Once agreed, you should review the performance of the payroll provider against the SLA in each pay period.