Guarantor of a good social climate, payroll management plays an important role in human resources management. Time-consuming and complex to carry out, it requires a certain level of expertise (legal, social and fiscal). As an SME manager, you are still hesitating between keeping payroll management in-house, via payroll software, or outsourcing it, via an external service provider.
But what exactly is payroll outsourcing? Which
providers to turn to? What cost does this represent? What is the best solution
for your SME?
In this article, we present the two solutions to guide
you in your choice according to your needs and your budget.
What is payroll outsourcing?
Payroll outsourcing is based on the principle of
entrusting payroll management to an external service provider. The payroll is
then carried out by the chosen service provider, based on the variable elements
that you have sent to them.
The different forms of outsourcing
There are two forms of payroll outsourcing.
We talk about partial outsourcing of payroll when you
use the tool made available by your service provider to manage payroll on a
daily basis. You must therefore enter the variable data directly into the
payroll software to generate your employees' pay slips. You share the tasks
with your service provider.
In the case of a total payroll outsourcing, you decide
to completely offload payroll management internally. This mission is delegated
in its entirety to an external service provider.
Be aware, however, that you will have to communicate
the data to your service provider. It is your responsibility to ensure that
this data is reliable to avoid any risk of error.
Take the time to discuss with your service provider
and check the pay slips produced.
Who should you entrust with payroll management for
your SME?
You have the choice between several providers:
- an accounting firm: for a practical matter, SMEs generally use an accounting firm. Indeed, this makes it possible to delegate to a single service provider, both the management of their accounts, but also the social management of their company. However, be careful, some accounting firms (especially small ones) do not always have qualified employees dedicated to the social aspect. The expertise may then not be up to your expectations.
- an independent payroll manager: using a freelance service provider allows a certain flexibility. You choose the missions you want to entrust to him according to your needs. As the data processed is sensitive, be sure to have a confidentiality clause signed.
- a company specializing in payroll management: if you have to completely outsource payroll management, give more preference to specialized companies, with professionals trained in payroll. You will thus be able to benefit from tailor-made HR expertise. You should also know that there are firms specializing in certain sectors of activity such as transport or audiovisual.
Finally, some publishers such as Sage Paie, 123 Paie
or Fiche-Paie.net, offer an outsourcing service. You work collaboratively on
their payroll software and then they do the processing. This is a solution to
consider if you ultimately plan to internalize payroll.
Why outsource the payroll of an SME?
Outsourcing payroll has many advantages for an SME:
- save time on a daily basis, regardless of the form of outsourcing chosen;
- avoid payroll errors and thus maintain a good social climate;
- benefit from legal expertise (especially if the regulations applicable in your sector of activity are fluctuating);
- reduce your costs (the allocated budget is the same each month, no recruitment costs and training costs necessary).
How much does payroll outsourcing cost?
Inevitably, using an external service provider
represents a significant cost. This cost will be more or less important
depending on the workforce of your company, but also depending on the service
provider chosen. Make sure you choose a service provider that meets your needs
and specificities.
In general, the chosen service provider will offer to
bill you per pay slip, i.e. an average of 25 euros per payslip.
To this can be added the provision of additional
services related to personnel administration such as the declaration of
employment or the drafting of an employment contract (allow on average between
50 and 100 euros for the latter). Other hidden costs of payroll outsourcing are
also to be taken into account, such as the monitoring of paid leave or the
completion of the nominative social declaration (DSN).
As this activity is not regulated, your service
provider can freely set its prices. So remember to clearly ask for its pricing
schedule for the services you need, to make sure that it fits into your budget.
Payroll software: the alternative to outsourcing
payroll
There are several reasons why you may not want to
entrust payroll management to a third party. And fortunately, there are other
solutions, including payroll software.
How does payroll software work?
Payroll software facilitates payroll management to
process it independently. As a result, its use remains simple and intuitive.
All you have to do is enter the variable payroll data (number of hours worked,
overtime, hours of absence, bonuses or benefits) for each of your employees.
The payroll software will then automatically calculate your employee's pay and
generate the corresponding payslip.
Make sure that the elements entered are compliant
before definitively validating your payroll.
There is a multitude of payroll software such as
Payfit, Sage Business Cloud or Listo Paye. It's up to you to choose the one
that best meets your expectations and needs (features, use, budget, etc.),
whether you are a very small business, an SME or a large company,...
Benefits of using payroll software
The advantages of using payroll software are essentially based on these many features that make payroll management easier if you decide to do it alone. They are indeed accessible, even without knowledge of HR management and more specifically payroll. Thus, even a VSE without an HR team can manage the payroll of its employees alone, without having to call on its accountant or another expert professional. We can cite :
- automatic calculation of salaries (net salary to be paid);
- the automatic update of the count of paid holidays;
- the automatic creation of the DSN;
- the dematerialization of payslips;
- centralizing and securing your HR data.
Automating these tasks saves valuable time for your
payroll manager. You will be able to reinvest this time in missions with higher
added value.
In addition, the payroll software ensures that you
reduce the risk of error. As a reminder, payroll errors can have serious
consequences (URSSAF and tax adjustment in particular) on the accounting
management of your company.
The limitations of payroll software
Even if it has real advantages, payroll software
nevertheless generates a significant cost. Indeed, beyond its acquisition cost
(annual flat rate), we must add the additional costs related to maintenance,
updates (legal and functional).
In addition, you will also need to train your payroll
employee to ensure optimal use of the software. Very often, employees only know
a tiny part of the features present in the software, which could nevertheless
save them precious time on a daily basis.
Conclusion: payroll software or payroll outsourcing
for your SME?
Selection criteria
To choose the best option for your company, it is necessary to carry out an inventory of your current payroll management process. So, determine beforehand:
- the number of monthly payslips to be calculated;
- the level of expertise requested (specificities of your sector of activity, status of your employees, applicable collective agreement, etc.);
- the budget allocated to payroll management;
- internal skills;
- the level of autonomy and responsibility;
- your possible IT constraints.
It is then up to you to evaluate, according to your
situation, which option is the most suitable. As far as payroll software is
concerned, do not hesitate to discuss with the brands, take advantage of the
demos and free trials to understand how the tool works and test them before you
start.
Comparative table between payroll outsourcing and
payroll software
To help you see more clearly, here is a comparative
table of the characteristics of each option.
So, as you can see, whether you choose to use payroll software
or payroll outsourcing is primarily a choice specific to your business. These
two solutions each have their advantages and disadvantages. It's up to you to
decide which one will best meet your expectations, your needs and your budget.