A calculated dilemma
A range of comprehensive in-house and outsourced solutions can help ease the administrative burden posed by payroll and accounting, writes Gillian Hamill
Print16 September 2010
A straightforward, reliable payroll system is crucial to the smooth-running of any retail business. Three main options within this sector each offer their own particular advantages, and may be better suited to one type of business structure over another. It is therefore important to be certain which of these choices; either in-house installed software, online accounting solutions, or outsourced packages; will deliver maximum efficiency for your business.
A Sage solution
Sage Ireland is dedicated to providing in-house business management software solutions to Irish businesses. Karen Kane, payroll & HR manager, Sage Ireland, explains more about the factors a retailer should consider when deciding whether to opt for an in-house or outsourced option. Kane believes there are several main factors to take into account.
“Firstly, consider your organisation; do you know the knowledge and skills of your staff? Do you keep record of any training or courses being carried out by employees? Decisions to outsource business functions are generally made because of lack of expertise but often businesses are not fully aware of the knowledge and skills amoung their own staff. Outsourced packages also tend to support limited configuration, if any. You must ensure any lack of control does not prohibit the running of your business.”
Comparing the costs of different offerings is a worthwhile exercise, adds Kane, who says it’s “important to consider setup, licence, upgrade and/or maintenance costs that may be incurred. However fundamentally, the benefits should easily override any cost necessary.”
Security is another factor she believes retailers should give their full attention. “A breach of sensitive data, particularly HR and payroll, could cause reputational damage to your business not to mention any regulatory action that may be incurred. Your software vendor should be able to address any question you may have and ease your concerns.”
In-depth cost analysis
The time saving advantages of such software options can prove invaluable moreover. “Almost every role in the country has an objective to improve performance and reduce costs,” says Kane. “This is no different for the payroll operator who is responsible for processing a company’s often largest overhead; salaries. The use of time-saving payroll features supports the payroll operator to provide added-value to the business. The domination of labour costs in business can be supported by in-depth cost analysis which allows the employer to identify costly benefits, rates or cost centres. This is crucial to allow the business to strategize and/or forecast more accurately.”
On the other hand, she points out that the administrative and legislative burden on the payroll function has increased significantly over the last couple of years alone. “Additional compliance to CSO, NERA, and JLC all add significantly to an already demanding role. For example, manually managing JLC compliance is challenging. Tracking an employee’s start date, date of birth, experience etc. and cross-checking them each pay period is a very cumbersome task, even for a small retailer. It is essential your payroll solution should address these time-absorbing issues.”
Freeing up time
Herbst Software is another company keen to tackle the fact management’s time can become absorbed in cumbersome, repetitive tasks. Herbst Software have been developing human resource technologies for the Irish SME for over 20 years.
Orson Herbst, marketing director, Herbst Software says the company “specialises in simplifying the management of a company’s most expensive and valuable resources, their employees. There are four major aspects when managing employees; time and attendance, payroll, human resources management and legalisation. Which aspects to outsource or do internally is something very dependent not only on the business itself but the actual owners.”
“Having technology which is independent from the location and can handle every aspect separately yet be fully integrated is the key to giving a company the option which best fits them. This is what Herbst Software provide with a range of partners offering outsourced and in-house solutions.”
Herbst believes that when deciding whether to opt for an in-house or outsourced option, retailers should “talk to a Herbst Partner and get some free advice which is relevant to your particular circumstances. Two shops that employee ten people each can have very different circumstance in relation to what is the best fit for them.”
Easy to use
In Herbst’s view, the most important features a payroll package should encompass are that it is easy to use and can integrate with a time and attendance clock card system. “It’s great if it can handle safety statements, accident records and also track general employee correspondence, as well as handling CSO and revenue requirements.”
While in-house packages offer several advantages however, and only require minimal training, he adds that the company also has many partners offering outsourcing around the country. “Being outsourced can often give you easier access or control.”
He adds that Herbst Software offers “absolute value for money. Doing something properly and efficiently is what allows a business move forward. The concept of doing something properly is more important than ever before, because this climate has no time for duplication and retailers therefore need to keep their eye on the ball. Herbst has a particularly good promotion on for 2010.”
The advent of simplicity
Advent is another company within the Irish market that delivers in-house software solutions. Ray Ryan, managing director, Advent Processing Solutions Ltd, believes “an in-house solution will be best in cases where there is an internal capability of carrying out the payroll processing. Managing your own payroll these days is a simple task and this is largely down to the enhancements made to modern payroll systems.”
He adds that having an in-house payroll solution also “gives the retailer the comfort that all of the necessary data on employee terms and conditions is accurate, up-to-date and is readily available at the push of a button. This is particularly important for inspection purposes.”
Retailers can also now use modern payroll systems to analyse their costs across different departments, which Ryan says can “be used to give them a much better understanding of the net profit position by department.” An in-house system he claims also means information is available when required. “There is no time delay in waiting for reports to be sent back from an outsourced service.”
All legislative requirements covered
He adds that it’s critical software is easy to use and navigate. “Software should be capable of creating submissions of P35s to Revenue Online, meeting all of the legislative requirements including PAYE, PRSI, BIK and Income Levy. Linking with “accounting software is also a big plus as this will cut down on manual journals.” The ability to save reports in PDF or Excel format will also help retailers to further analyse their data.
A system must also be able to manage Joint Labour Committee (JLC) wage rates, says Ryan. “The ability for payroll software to handle the JLCs in a transparent way can’t be stressed enough as it would be very costly for retailers who have been inspected by NERA and who are not fully compliant.” As well as ensuring compliance and reducing administration time, having the JLC functionality in your payroll software can also deliver cost savings, because it will show if a retailer is actually paying employees over the JLC rates, and then if they wish they can implement savings by “paying employees the correct rate in line with their JLC entitlement.”
Finally, Ryan adds that, “having a support agreement in place gives retailers the comfort in knowing that if they come up with a particular query or problem, that they can just pick up the phone for assistance.”
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