How Much Control and Access do I Have When I Outsource Payroll?

Payroll Outsourcing has become a growing trend for businesses, especially small to medium businesses. One of the main reasons for this is that it frees up the business to focus more on its product by outsourcing to an experienced third party to focus on running the perfect Payroll. However, this handover of data and control is a concern point for companies protecting their employee’s data in line with the POPI act, GDPR, and the like.

In this article, we will gain an understanding of what data you hand over, how it is protected, and ultimately how much control and access you have to it when outsourcing Payroll.

Outsourcing Agreements

Firstly it’s essential to understand your outsourcing agreement with the third party. Typically in the agreement, you hand over the responsibility of payroll input, payroll processing, payroll reporting, payment upload, and sometimes tax submissions, but you will have the right to determine which responsibilities are kept by you and which are handed over.

I will always be advised to have a needs analysis meeting with your outsourcing provider in order to determine what would be best for your business.

What data is handed over?

All data relevant to Payroll is handed over in order accurately process Payroll. This will mean full access to employee personal data, and relevant financial data will need to be given to the payroll outsourcing team.

The data right will remain your business’s though. It is always important to ensure that your SLA with the service provider also states that the data rights will remain yours.

How much control of the data do I have?

This question refers to data security. Regarding data security and handling, the third party requires a Service Level Agreement to be signed which will describe what control and access you allow them to have. The SLA should be designed to hold both parties to lawful and safe practices regarding handling the data.

Once the SLA is signed, you still maintain much control. You still control the data sent for monthly payroll input. However, you no longer control how it’s put into the system. If you have any queries about the data that’s been placed into the system, you will very likely be able to view the audit log of events on the system and see what has been done.

Can I access and edit data?

You can access the data based on the permissions that are set. How it works is that the payroll system has different roles created, for instance, a super admin is the payroll admin. Different roles with different limitations and permissions can be set up to match the roles in your company, E.G. HR can view employees’ data and act on their behalf, Manager can approve leave of his downline. In this way, you may also request to have a super admin setup for your company. As an admin, you will be able to access and view what you need to, because editing is not usually necessary, as this is why you hired a third party, and any outside edits could disrupt the system. At the end of the day, you can access and view data if you wish to edit you will need to ensure you are adequately trained on the software and in best payroll practices and legislation and that you have excellent communication with your payroll service provider.

How to keep data accurate?

Data accuracy largely depends on how you capture it and how it is put into the system. The part of capturing the data is usually handled between ESS and the business’s HR processes and then the second part of inputting the data is handled by the third-party payroll service provider. What can become a problem is when data is hard for the third party to understand, or when there are lacking HR processes resulting in constant missing data. To resolve any major or minor issues with retrieving and inputting data, it’s necessary to improve constantly and to work closely with your third-party payroll provider to iron out your processes.

Conclusion

The main change is management change for payroll input, processing, and reporting. This change brings relief to many companies concerned about compliance and accurate Payroll.