As a new business is starting up and it begins to hire its first employees, most businesses turn to simple accounting and payroll solutions. At that point it is the wise thing to do, because a simple software solution is budget-friendly and able to handle basic tasks. However, as the business really starts to get off the ground, the upcoming growth starts to push this entry level payroll software to its limits. In this situation, the company has three options how to proceed:
1. The company settles for its current software which is slowing down growth and development plus causing headache to its users. The company is trying to handle the payroll completely by itself even though it requires more and more profound understanding. Therefore, the risk for serious errors keeps on growing. After fixing one error after another, the solution’s budget-friendliness is long gone.
2. Payroll is still handled as an in-house solution, but the company decides to update its software to a solution that can respond to growing requirements, is user-friendly and supports the growth and development of the business.
3. The company decides to outsource its payroll completely to a partner which has software like in the point 2 and on top of that has deep understanding and expertise about the topic.
9 red flags that you should keep eye on
Well, how are you able to tell when the business is at the point where it is profitable to update its payroll software and/or outsource? These following red flags usually indicate that the time is right:
- The need for hiring arises at a rapid pace creating challenges in terms of payroll size, frequency and accuracy.
- Leaders and managers start requesting more detailed information about payroll expenses for budgeting and planning purposes.
- Troubleshooting and fixing issues takes more and more time.
- Employee information is being entered into more than one software application.
- The company has a growing need for an HR solution that is integrated with payroll to track time off balances, fixed assets, effective dates on employee records and provide compliance reporting.
- Late filing of taxes due to inaccuracies, or not being notified.
- You need to run an off-cycle payroll batch, and your payroll provider wants to charge you an additional fee.
- Payroll related vendors (such as insurance carriers) list starts to grow and you are unable to automate their payments
- More and more complaints are filed by employees because they either can’t find their payroll and HR information themselves, or they have to log into multiple applications.
You don’t have to go through it alone
Does this sound painfully familiar? Congratulations if it doesn’t but we recommend that you keep your eyes open for these signs – they may occur later in the future. However, if this described your situation a little bit too accurately, we’d like to comfort you by telling that help is available!
Especially growing companies need a software that is flexible in different organizational structures and sizes. Therefore, it helps companies to understand payroll expenses in more depth which again helps to improve planning and budgeting. Centralizing HR and payroll under one software is also a significant benefit.
We at Staria offer outsourced payroll services with Finland’s most popular software Mepco. The services are always customized to your needs. Contact us and we’ll tell you more about how we can ease your pains!
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We have prepared a guide covering various scenarios describing how companies generally avoid problems with international financial administration, as well as the pros and cons of the various solutions. Read more.