Online payroll services are in transition. As we have moved to put more of our lives online, companies are discovering that they need to bring payroll back into the broader arena of overall business management rather than continue to treat it as a standalone entity. Simply put, payroll is once again becoming part of the back office function. Service providers must either find a way to expand their own services to include back office function or face losing out on growing market share.
Why the transition? There are several factors in play here including regulatory compliance, more complex accounting, and the demands of a millennial workforce that expect instant access to data and information. Online payroll is definitely going through systemic changes that will eventually result in a new product far different from anything we know today.
Legal Compliance More Challenging
Compliance with state and federal laws has always been part of offering payroll services in America. That much is nothing new. But with every passing year, regulations tend to get more complex. Take the implementation of the Affordable Care Act (ACA) as just one example. It is not enough for a payroll company to simply deduct state and federal taxes from salaries and combine that money with employer contributions to meet tax liabilities. They must now account for the ACA as well.
This means more data and functionality that ensures all qualifying employees are getting the health insurance mandated by the law. It means keeping track of certain accounting functions to make sure employers remain in compliance with the health insurance they offer. Just the implementation of this one law alone has made online payroll significantly more complicated. It is up to service providers to master the complexities in order to maintain compliance for their clients.
More Complex Accounting
One of the biggest reasons for reintegrating payroll into back office function is the reality of the more complex accounting made necessary by regulatory changes. Using the ACA as an example once again, the data has to be shared between payroll and general accounting to keep track of monies moving in and out. Benefits supervisors must be able to interact with executive management in situations where access to real-time data is necessary.
The best way to think of this is to imagine one small division of a company working off-site, completely separated from the rest of the company, and still trying to coordinate efforts between both sites. It just doesn't work. Payroll has been an independent entity since the introduction of the payroll services industry decades ago. It now needs to be brought back into the office in order to satisfy more complex accounting needs.
The Millennial Workforce
Last but not least is the reality that today's millennial workforce is more involved than ever before in payroll. They are no longer content to collect a paycheck and hope that HR is taking care of things. Today's workers want access to their payroll data alongside information about health insurance, sick days, and other benefits they might be entitled to. Keeping payroll separate from all of the rest of the data is simply inefficient.
By reintegrating payroll into back office function, it is possible to share data in the cloud, in a way that makes it feasible to meet the demands of the millennial workforce. Any payroll services provider insisting that payroll remains separate will quickly discover clients are not satisfied with the services provided.
The Single Solution: Payroll, Tax Compliance, and Benefits
That’s why at BenefitMall we pride ourselves for having over 35 years of experience in both payroll solutions and benefits administration. We mix powerful online solutions and service with real people working together to help simplify your business and your needs. By offering payroll and tax compliance, benefits administration, ACA compliance, and additional products and services such as 401(k) and workers’ compensation, we give you a full service solution tailored to fit your needs. Forward-thinking, creative solutions all at your fingertips.