Precise Payroll Service (cont.)

New companies in Vietnam tend to outsource to a local payroll service provider because of labour law compliance, timely payments, accuracy and confidentiality.

Payroll calculation and payments are the most important task of every organisation, not only in Vietnam but also around the world. However, most CEOs or HR Managers are still not aware of its importance, perceiving it be simply an administration task. They do not yet understand its impact on the business if not done in the right way. 

Labour law compliance must be paid great attention, such as what income is taxable and how much should be deducted for compulsory insurance contribution. Organisations need to stay up-to-date on the Labour Law, especially in Vietnam, where change can happen frequently. Furthermore, applying those changes to the payroll also requires expertise. If organisations fail to stay updated on the Labour Law or lack expertise, they may easily become non-compliant. 

Timely payments are the second matter of importance, expressing the commitment of the organisation to their employees and strengthening the company’s reputation. However, there have been cases where payroll very much relies on one person, making company’s struggle when this person is absent. 

Accuracy is the third matter in need of focus. In order to make sure the calculation and salary payments are always accurate, organisations need to invest in a team with the process of different roles of doer-checker-approver and the infrastructure (server, back-up and restore system) for testing accuracy, but most organisations can’t afford or not really want to invest in this. A lot of time can be wasted on reviewing the process to uncover errors. 

Confidentiality is the fourth matter. Most organisations are highly aware of this and always try to minimise the risk of unauthorised persons accessing confidential information. Last but not least, for multinational companies with high audit standards, the local office must invest in the system and infrastructure needed to satisfy the parent offices’ requirements. 
Some organisations find it difficult to maintain consistency in the delivery of results in these matters, especially those of large size or with complicated payment processes or many transactions, like enterprises in the oil and gas or manufacturing industries. 

Most new market entries therefore prefer to use the payroll service of a professional and reliable local agency. The payroll service provider, as an expert, will keep organisations informed about updates to the Labour Law and provide useful advice on how to apply those changes efficiently. Furthermore, the payroll service provider is a professional team that is always available to the organisation, rather than one individual in-house. The best outsourcing vendor is one that has an entire system, with full quality control processes and back up plans to ensure confidentiality and accuracy, so there is no need for an organisation to make huge investments. They can also easily customise software to deliver various reports for organisations, thanks to their IT team having strong knowledge in human resources issues. 

Generally speaking, payroll is a task that brings many hidden risks if not done properly and in a timely manner. Whether organisations conduct it in-house or seek for the payroll service from a third party, comprehending the Labour Law and having payroll expertise and software, servers, and backup systems are indispensable factors that organisations need to be fully aware of.

For payroll & HR outsourcing needs, please contact Ms. Nguyen Thi An Ha via email nguyen.t.an.ha@talentnetgroup.com or via phone (84 8) 6291 4188 – Ext: 400

If you have any questions, do not hesitate to contact our Payroll service in Vietnam.