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Volume 31, Issue 4

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A virus has damaged the network irreversibly. Weather conditions force an area evacuation. The building has caught fire. No matter what the crisis, preparing paychecks and handling payables is one of the last things organizations should worry about in a disaster situation. Amid the paper tsunami of invoices and statements, payroll and accounts payables, such processes take a toll on many businesses in even normal circumstances. To ensure no disruptions of payroll and payables, many companies large and small are turning to Web-enabled outsourcing services to send payment files electronically for secure printing, processing and mailing.

Although essential to keeping a company up and running, printing and distributing payroll and payables are cumbersome tasks, and what’s more, they are not a core competency for most organizations.

How much does your organization invest in check and envelope stock for payroll, statements, invoices and other financial documents? What are the costs and time spent on stuffing items into envelopes? What do you spend on equipment maintenance and printing? How much do you spend on postage and other related mailing costs for these advices?

Chances are, the answers to the above questions are, “more than we want to.”

Many organizations are concerned about the lack of resources, savings and security of their current in-house processes. Accounting staffers would rather concentrate on their principal jobs, than the headaches associated with the payables print factory. Financial officers worry about the bottom line and the appropriate allocation of resources.

Payroll and payment outsourcing is a viable and economical alternative, yielding many benefits.

Besides allowing focus on what really matters to the welfare of the company, staffers actually increase overall administrative productivity by better utilizing resources.
They don’t have to worry about risks such as stolen or missing checks, reprints, paper jams and other costly annoyances. Organizations save on the costs of paper, printing, equipment and postage through economies of scale. Employees and vendors expect and appreciate the accurate and timely disbursement of checks. In the event of a crisis, outsourcing offers redundant facilities to keep organization’s documents flowing.

Through outsourcing, companies also have an efficient migration from paper to electronic-based payments with electronic transmission of payments.

Outsourcing in Practice

When companies identify the need to throw a safety net over their own capacities, they choose to outsource. For 26 years, Jack Bergan has served as the treasurer at Morgan Construction, a fifth-generation global steel processing company based in Worcester, Mass.

As a manufacturing company, Morgan Construction has many accounting rules with regard to overtime pay, off-shift premiums, holiday and vacation schedules, as well as the full payroll structure. The company had built its own payroll system to accommodate the 500 hourly, monthly-paid employees.

“Outsourcing has increased productivity, freed up resources to work on important projects, and increased security in the payroll process and saved this company money by outsourcing the paper factory,” said Bergan.

Access Partners, a medical information services and practice management company based in Milford, Mass., sought a better method to produce and mail the patient statements for 400 physicians in 70 medical practices.

Using outsourcing, Access Partners securely transfers the printing, processing and mailing of 15,000 monthly statements. Secure transmission of patient information, as required by Congress in the Health Insurance Portability and Accountability Act (HIPAA), is of utmost importance to Access Partners and their healthcare customers. HIPAA represents a new set of government standards guaranteeing the privacy of personal medical information.

According to Gary Janko, president and CEO of Access Partners, “We are in the business of delivering information systems, processing data, and analyzing information. Our core competency is not processing paper.”

By outsourcing the paper factory, Access Partners optimized the potential of its human and technology resources. Employees formerly assigned full-time to patient statements will now support more critical and demanding initiatives to enhance electronic handling of data over its secure wide area network. Printers once dedicated to patient statements will run other important functions aiding in the company’s core information processing and practice analysis functions.

What to Ask Before Outsourcing

Before outsourcing any financial process, companies should make sure an outside service bureau offers flexibility for various disbursements, an intuitive program that requires little training for staffers, low-cost service, and proof of high-performance and reliability. Outsourcing transactions should be encrypted, compressed and password-protected, providing the benefit of advanced security. Ensure the supplier has redundant facilities in place and will provide 100 percent fault tolerant business operations for distributed payment systems. Companies also can justify the move to out-of-house processing by requesting a return on investment analysis for payments outsourcing.

Most importantly, companies have the opportunity to focus on their core objectives and goals by outsourcing payment print production to an organization whose core competency is just that.

Neal Anderson is the president of Payformance Corporation, a Florida-based company providing secure payment systems and payments outsourcing for businesses worldwide. Send comments to This email address is being protected from spambots. You need JavaScript enabled to view it.. For more information visit www.payformance.com.