5 Tips for Successful Payroll Provider Management
A global payroll department has many critical areas: accuracy, timeliness, funding, service, and many more. When it comes to relationships, one relationship qualifies as critical: your relationship with your payroll provider. There are multiple types of payroll providers: local in-country providers, global payroll processors, and global payroll aggregators. Unless you’re a very streamlined business, you more than likely have more than one type of payroll vendor. Regardless of which type of vendor you have, the following five tips on how to manage a payroll provider can make that critical relationship a successful partnership.
1. Establish clear defined roles – Who will own the relationship with the vendor?
To manage a vendor, it’s important to establish clearly defined roles within your company as to who maintains what type of relationship with the vendor. Identify a person to have a strategic relationship with the vendor. This would be someone within or closely related to the payroll function: not someone in procurement or sourcing. This person would have a relationship with the vendor contact who is responsible for your company’s overall account. Then, your company’s day-to-day process owners would have relationships with the vendor’s day-to-day process owners. This will allow everyone to keep proper focus on their responsibilities.
2. Communicate well with your vendor – Schedule regular meetings
One of the best ways to keep focus on responsibilities and the relationship is to conduct regularly scheduled meetings with your vendor. The day-to-day contacts should meet regularly, such as weekly or every other week, to keep current on what issues have occurred in the recent pay and to plan for the upcoming pay. The timing of these meetings should align with your pay frequency.
Beyond day-to-day meetings, you should have regular client account meetings; these are typically once or twice a month. During these meetings, discuss performance, customer service issues, and any upcoming changes to the account, such as significant changes to starters and leavers.
Then, once or twice a year you should have an account overview meeting with your vendor. Typically held with senior leaders in the company, account review meetings discuss each team’s performance over the time since the prior meeting, any upcoming company changes due to acquisitions and/or divestitures, and any new offerings from the vendor.
3. Monitor Invoices
One topic you might discuss in your client account meetings is any invoice issues. Monitoring invoices is a key financial responsibility to managing any vendor. When it comes to managing a global payroll vendor, though, there are more elements to monitor. In some cases, your invoice may include fees from not only your vendor but also fees from an in-country provider.
Also, you’ll want to review the foreign exchange rate. Since those rates fluctuate daily, you’ll want to make sure they’re reasonable. One invoice I reviewed had an FX rate of 7.50 instead of .75. When comparing to the prior month’s invoice, I noticed the expense had greatly increased. I’m not suggesting validating each exchange rate especially if you’re in 60 countries or so, but comparing one month’s invoice to the prior will bring issues like that to light.
4. What additional services can your vendor provide?
The client account meetings are also a place to discuss additional services your vendor can provide for you. Whether it’s your vendor or maybe one of their in-country providers, they might be able to offer you other services without you having to source another vendor. In a lot of cases, the in-country provider can help with employee and employer registrations. In countries, such as Russia, where payroll and accounting are closely related, the vendor might be able to be your accounting vendor as well. Or, maybe you don’t have a legal entity setup in a country: your vendor might be able to serve as an employee leasing company.
5. Set SLA’s/ Key Performance Indicators
As mentioned earlier, it’s important to review each team’s performance. The review isn’t just about monitoring the vendor’s performance: are people being paid accurately, are payments made timely, is customer service satisfactory? It’s also about getting feedback on your company’s performance: are deadlines being adhered to, is your company using the proper data submission tools, are you reviewing results in a timely fashion? Having established Service Level Agreements (SLAs) or Key Performance Indicator(s) will make this a standard process each month. Regardless of how the measurement is labeled, be sure to have the measurements in writing and review both yours and the vendor’s performance month-after-month to focus on improvements.
These are just a start to the list of steps you should take to, not only manage your payroll provider, but also to establish a relationship with them. As with any relationship, be open with your vendor. Be direct. Be straight-forward. Most of all, remember it’s a two-way relationship. The more you treat it as a relationship or partnership, you’ll be able to succeed together.
Join our upcoming webinar Tools for Managing Payroll Provider Vendors. During this webinar we will discuss the key points to consider when selecting a Global Payroll Partner and how to build successful, strategic partnerships with your vendors.
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About the author
Robyn Maslouski, CPP, has been a Certified Payroll Professional (CPP) since 1996. Maslouski spent many years in the payroll profession in the telecommunications, banking, and health care industries and currently is owner of Robyn Maslouski Consulting LLC. Throughout her career, Maslouski has implemented HR, payroll, and service center solutions across 50 countries. She was the American Payroll Association’s (APA) Payroll Woman of the Year in 2013.
Using Payslip, we can manage all our payrolls across nine in-country vendors on one platform. When the global Covid-19 pandemic arose, it was not an issue from a payroll perspective, and critically getting everyone paid. The Payslip platform enabled continuity for our international payroll service including the fast and seamless implementation of the Payslip Employment Self Service during this time.
Payroll Manager, LogMeIn
With business and employee growth rates of above 50%, we rely on our vendors to deliver on time, every time. Payslip’s workflow automation, enables Phorest to manage our payroll provider process – data driven, real time and transparent. Payslip saves us time so we can focus on our business growth.
International Payroll Manager, Phorest