Payroll companies are in a high demand, businesses don’t want to take on the stress of managing the payroll for their employees. They outsource this to payroll companies; this is a guide on how to start a payroll company in South Africa.
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Overview
Payroll companies often manage the payroll, taxes and other financial aspects of the business that might be deemed as tedious by entrepreneurs. This can also overlap into accounting for some businesses. This creates a huge market for payroll companies, the industry has seen steady year on year growth averaging 5%.
The barriers to entry are not that high when you have the necessary experience and education. They can be prohibitive if you have neither, this is because you will need to know how taxes work and other laws surrounding employment.
Get experience
It’s best to get some experience before venturing on your own, there are a lot of challenges waiting for you and these can be difficult to solve if you don’t have experience. You will have to make sure that employees are paid on time, every time and there is very little margin for error.
This job requires you to be very confidential because you will be working with client data, which is often very personal. It requires a high level of discretion and you will also be required to work on strict deadlines. Working under pressure makes it easier to slip up and cause a few errors, which may lead you to panic.
Having the necessary experience will make it much easier for you to succeed. You will also learn a lot of things about the nature of the job and how you are supposed to handle your own employees when you start your payroll company. You will also know how to work with employees and independent contractors.
Set up operating premises
You don’t really need huge offices; your offices should be just big enough to conduct your operations. You won’t get a lot of people coming to your offices each and everyday as you will be working with companies.
Most of the things will be done digital and there is rarely a need for a physical meetup. Your offices only need to have a reception area and a working space for your employees. You can run this business from your home if you are going to be the only one working.
Choose a payroll system
A payroll system makes it easier to automate the whole thing, it’s best to choose one with an integrated HR system. Popular options include ADP Workforce Now, Gusto and Patriot Payroll. You can get these from as little as R500 for processing 10 employees. The price is different for organizations with over 50 employees.
Marketing your company
There are a lot of ways that you can use to market this company, the best ways are often the unconventional ones. Advertising on a billboard won’t really do much to bring you customers. It’s important to know that companies are your customers.
You need to have a way to reach company executives and propose your solution to them. The best businesses to target for a start are startups, larger companies usually have an inhouse payroll system. You can market your business by cold calling or networking.
Conclusion
This was a guide on how to start a payroll company in South Africa. Do you have any thoughts or questions? Comment below.
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