Reasons to have your payroll accounting entrusted to a partner outside the company
Keeping up to date with regulations. Payroll accounting depends on numerous acts
and regulations. Since Income Tax has been introduced eight years ago, these
regulations have been revised at least once a year. A payroll accountant needs
to be familiar with the following:
  • Income Tax Act and Income Tax Regulations
  • Pension Insurance Act
  • Compulsory and Voluntary Pension Funds Act
  • REGOS Regulations (revised approximately 20 times so far)
  • Health Insurance Act and Regulations (revised on average twice a year)
  • Labor Act
  • Payment Transactions Act
Payroll accuracy. Virtually all of our clients had experienced errors in their payroll accounts
prior to bringing their business to us. These errors were eliminated once we took over their
accounts. Should any errors occur in our practice, they are promptly recognized and repaired,
due to our detailed familiarity with the overall system. Clients who undertake payroll accounting
on their own, frequently cannot efficiently cope with errors.

Timely payment. Since REGOS (Central Registry of Insured Persons) has started monitoring
payrolls, various problems regarding payment were noted. As all the data is encrypted
(protected), data transfer to the central database is frequently obstructed due to following reasons:
  • REGOS changes its software during data processing;
  • REGOS has not made necessary updates of the Regulations enacted by REGOS itself;
  • the Regulations are self-contradictory (e.g. REGOS officials confirm the validity of
    data, yet the payment cannot be executed when FINA officials attempt to process the data).
Prompt reaction. Such situations as listed above normally require the software to be updated,
which can be time-consuming, causing an unwelcome delay for the client. However, we can
promptly react in execution of such services, breaking the payment "barriers".

Data storage and reconstruction. Frequently, there are inconsistencies between the payroll
accounts and the payment itself. The accounts occasionally need to be reconstructed (due to
audit, benefits payment checkup, court expertise, etc.). It is customary for a company keeping its
own accounts to find the databases inappropriately stored, incomplete or altogether missing. It is
important to emphasize that payroll data are defined as permanent. They should be available even
after a company ceases to exist. (E.g., we still file reports to authorities on Societe Generale Bank
(which left Croatia in 2000) and BHV Bank (left Croatia in 2001).

Payroll confidentiality. Many companies subscribe to payroll confidentiality, which is another
reason to entrust accounting to a partner outside the company. Employers are thus protected from
undue criticism on behalf of any parties; additionally, they are free to reward their employees at will,
which prevents "Why-does-he-get-paid-more-than-I-do?" situations.

Filing reports to authorities. Control mechanisms require the reports to be filed on time and
synchronized with payment accuracy. Due application of new regulations is of utmost importance here.

Filing reports to the management. Our structure of data storage enables the creation of
accurate and prompt reports of all kinds. This structure, in which a large quantity of data is
organized in a handy way, makes possible a fast creation of reports on any desired payroll
detail. Each company has its own methods of payroll supervision, so the management can set
its own criteria for the creation of a steady flow of reports containing accurate data. These
reports save valuable time which would otherwise have been wasted on creating analyses and
making decisions.
  • Story 1: Interbrew is introducing SAP's software in this part of Europe. They hired
    a London company to evaluate and test the software they were currently using.
    Their analysis has shown that the entire software had to be changed, except for
    Personnel Records and Payroll Accounting programs developed by our company.
    It turned out that our software had more options for data processing than SAP's,
    notwithstanding the high standard and overall quality of SAP's software.
  • Story 2: Auditors from PSA Group (Peugeot) evaluated our database structure and
    reporting system, to conclude that our software meets the highest standards of quality,
    surpassing even their strictest criteria.
Cost-effectiveness. Our research has shown that foreign companies who require this service
are projecting to pay HRK 50-200 per employee (6,5-25), depending on the size of a given company.
Our experience with companies we have worked with has proved that our prices allow for a cut in
costs up to 50% (covering the costs of personnel, expendable supplies, equipment, time consumption),
and ranging up to 10% costs overrun.

Considering all of the above, plus the customer-friendly methods of running our services, it is
our opinion that our offer is financially sound, even in those cases where there was a slight
costs overrun. Additionally, if any of our clients should withdraw their business from Croatia,
we continue filing all necessary payroll-related reports, free of charge.