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Outsourcing your payroll: how to choose the best provider for your business

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Capital One Survey Reveals Opportunities for Innovation from Commercial Card Providers

By Bruce van Wyk, Director, PaySpace 

There are many good business reasons to outsource your payroll. The most well-known are increased efficiency and reduced costs, but these are just the tip of the iceberg. With so many benefits on offer, the only real concern holding businesses back is figuring out how to choose the best provider. The list of payroll outsourcing providers is long, and most seem to offer a very similar solution.

To help you identify the best supplier for your needs, here’s what you need to keep in mind when sourcing and short-listing payroll providers.

  • Data privacy and protection

Data management legislation is getting stricter around the world. The GDPR came into effect earlier this year and affects any business that gathers, stores or uses information relating to EU citizens. It doesn’t matter if your company is based in Parys or Paris – if it deals with EU citizens either as employees or customers, then it needs to adhere to the new regulations.

In South Africa, the Protection of Personal Information (POPI) Act comes into effect this year. [i]This relates specifically to local businesses and will transform how they capture, store and use personal information. Companies have a grace period of 12 months to prepare their processes but once up, they will have to adhere to the Act or suffer penalties.

Adjusting to new legislation is always a potential minefield. Working out the new requirements and implementing them in the most efficient way possible, takes time and adds an enormous amount of work onto your payroll team. Partnering with a payroll provider that is already compliant keeps your in-house resources free to focus on what they do best.

Ideally, it makes sense to choose a payroll provider that develops its own payroll software. This ensures a greater level of control, accuracy and compliance as it’s all managed under one roof. It also provides enhanced security. Your payroll manager and the payroll provider can work together to make sure that employee data is encrypted and protected. Data security is a serious issue for companies of all sizes. Which means the provider you choose to work with needs to be serious about it too. 

  • Legislative compliance across multiple territories
Clyde van Wyk

Clyde van Wyk

International businesses have to make sure that their payroll functions operate seamlessly across all territories and are fully compliant with local legislation. Once again, working with a payroll provider that is already legislatively compliant in all these countries makes this much easier.

In some African countries, achieving and maintaining legislative compliance is especially demanding. It’s not uncommon for legislation to change almost overnight and come into effect without any warning. Without the right processes in place, it will take some time for your business to adjust and in the interim, you could face a severe penalty for non-compliance.

Legal misinterpretation is another all too common mishap. No matter how innocent the oversight, misinterpreting just one regulatory clause will create problems and count against you. To keep your expansion plans as on track as possible, your operations need to remain 100% compliant at all times – legal dramas just aren’t worth the time, cost or hassle.

  • Check for conflict of interest

Before you sign with a payroll provider, check that there is no conflict of interest. What looks like the perfect partnership may not be so great in the near future if, for example, you outsource your payroll to a supplier that also ends up auditing your business.Section 90 of the Companies Act states on page six that: “the independent review of the company’s financial statements must not be carried out by the independent accounting professional who was involved in the preparation of the financial statements.”

The Companies Act goes onto explain that the classification of financial records includes assisting clients with outsourced payroll systems. So, should the financial services company in question be tasked with auditing your business, you could be forced to look for another payroll provider – and be required to change your suppliers quickly.

It takes more than good chemistry to make a truly successful partnership. The payroll provider you choose needs to understand your business challenges as well as the countries in which you operate. Their legislative knowledge, process and skills need to be fully compliant to ensure best payroll practice and help you scale your business successfully as you expand into new territories.

The demands of global payroll require a solid infrastructure to deliver a robust, cross-border solution from one centralised location. Outsourcing your payroll can seem like an overwhelming challenge but with the right support, you’ll benefit from a partnership that takes the stress out of international expansion and adds real value to your business.

[i]https://www.seifsa.co.za/the-popi-act-comes-into-effect-in-2018/

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H&M, IKEA and Stora Enso backed TreeToTextile builds sustainable fibre demo plant

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H&M, IKEA and Stora Enso backed TreeToTextile builds sustainable fibre demo plant 1

STOCKHOLM (Reuters) – A venture part-owned by Finnish forestry group Stora Enso, Sweden’s H&M and IKEA said on Tuesday it was set to build a demonstration plant in Sweden for a new, more sustainable wood-based textile fibre after years of research.

To markedly reduce their climate footprint and pollution, large apparel and furniture brands are in dire need of affordable greener alternatives to cotton, traditional viscose and polyester. Several Nordic pulp makers are part of projects developing new clean ways https://www.reuters.com/article/us-nordics-forestry-idCAKCN0WF076 to turn trees into textile fibre.

TreeToTextile said in a statement its plant would have a production capacity of 1,500 tonnes and its owners would fund the bulk of the 35 million euro ($42.6 million) investment.

“The novel process is deliberately designed to have low energy demand and low chemical need. It is engineered to suit large scale production and includes a recovery systemfor reusing chemicals,” it said.

“By investing in a demonstration plant, we are finally on the go. With it we are turning years of R&D into reality to increase the biobased share on the textile market to support climate action.”

TreeToTextile, whose fourth part-owner is innovator Lars Stigsson, said the plant would be located at Stora Enso’s Nymolla mill in Sweden, and its construction would start in the near future.

Viscose is the main existing textile fibre from wood pulp – followed by the newer lyocell which has a cleaner manufacturing method. Production is dominated by Austria’s Lenzing, India’s Aditya Birla and China’s Sateri.

($1 = 0.82 euros)

(Reporting by Anna Ringstrom; Editing by Angus MacSwan)

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IHG books $153 million loss, Holiday Inn softens coronavirus blow

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IHG books $153 million loss, Holiday Inn softens coronavirus blow 2

By Tanishaa Nadkar

(Reuters) – InterContinental Hotels booked an annual loss of $153 million on Tuesday, pummelled by repeated COVID-19 restrictions and lockdowns, but said a faster recovery in its Holiday Inn Express brand had helped it outperform in key markets.

The company, which previously scrapped its final dividend, said 2020 was the most challenging year in its history as revenue per available room slumped 52.5%, with global travel and entertainment spending remaining under pressure.

Pinning its hopes on the global roll-out of COVID-19 vaccines and a wider economic rebound, IHG said the industry was unlikely to see a recovery until later in the year but hinted that global travel was starting to recover.

“People want to travel again…It is the thing that people have missed most and so there is enormous pent up demand to travel,” Chief Financial Officer Paul Edgecliffe-Johnson said, adding that “travel will come back very rapidly.”

Shares of the company were up 3.8% at 5,516 pence by 0845 GMT, amid a near 3% rise on the FTSE 350 travel and leisure index as Britain saw a surge in flight and hotel bookings after the government said would-be holidaymakers will be given clarity on making plans for the summer by April 12.

Demand remained stronger in IHG’s Holiday Inn Express business, which represents about 70% of its rooms in the U.S. market and has historically been impacted less and recovered faster than other segments in economic downturns, the company said.

“IHG is at the start of a prolonged period of commercial recovery,” Peel Hunt analysts said in a note.

Still, IHG reported a group operating loss of $153 million for the year ended Dec. 31, compared with a profit of $630 million last year.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Devika Syamnath and Alexander Smith)

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Aviva sells French business to Macif’s Aéma Groupe for $3.9 billion

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Aviva sells French business to Macif's Aéma Groupe for $3.9 billion 3

LONDON (Reuters) – Aviva has agreed the sale of its operations in France for 3.2 billion euros ($3.89 billion) to Macif’s Aéma Groupe, as part of the British insurer’s shift to focus on its core operations in Britain, Ireland and Canada.

London-based Aviva, led by boss Amanda Blanc, said the sale would increase excess capital by 2.1 billion pounds ($2.95 billion) and cash of around 2.8 billion pounds.

Aéma Groupe, formed in January through the merger of French mutual insurer Macif Group and Aésio Mutuelle, has 8 million customers and a turnover of 8 billion euros.

Aviva France has 3 million customers and 7.8 billion euros in revenue. It covers life insurance, property and casualty and asset management markets in France.

Aviva’s share price rose by 1.7% at the open in London.

“The transaction will increase Aviva’s financialstrength, remove significant volatility and bring real focus to the Group,” Chief Executive Officer Blanc said.

Aviva expects to use the proceeds of the sale to support debt reduction, invest for long-term growth and return excess capital to shareholders.

The sale is central to Blanc’s turnaround plan aimed at streamlining its business after prolonged share price weakness has concerned investors.

The insurer, which aims to complete the disposal by the end of 2021, is looking to sell its continental European and Asian businesses, it said last year.

Final bids for its Polish operations that could fetch around 2 billion euros are due on Friday, sources have previously told Reuters.

It is also in the process of selling its Italian business, sources had said.

($1 = 0.8218 euros)

($1 = 0.7108 pounds)

(Reporting by Clara Denina; Editing by Rachel Armstrong, Louise Heavens and David Evans)

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