The Benefits of Payroll Outsourcing
More and more company HR and finance directors are outsourcing payroll. The number one reason to outsource payroll is time. Payroll process that is done internally is time consuming and difficult to manage. Processing payroll, and cutting and distributing checks are only a small part of payroll processing. It’s difficult to maintain accurate records. There is also a risk that payments are not made on time, and concern that staff is handling confidential information.
The second biggest reason to outsource payroll is to save money. It is expensive to have staff that is completely devoted to payroll. Many business owners underestimate how much it really costs to process payroll internally. The direct costs of payroll go down when outsourcing payroll. There is ease and flexibility to payroll outsourcing. It’s easy to track costs. You know exactly how much it costs you.
Companies who use payroll outsourcing get services based on best practices. They can take advantage of the expertise of the outsourcing company who is up to date on the regulations, rates and government forms. Businesses can avoid tax penalties for late or incorrect filing and payments. There are no technology headaches either. Payroll outsourcing companies have the latest payroll software and tax tables. They also have trained experienced accountants on staff.
A business may know everything about their field, but have no experience with pay, vacations, and deductions. If daily and weekly payroll chores get to be too much, outsourcing is a welcome choice. If your current payroll process is not working as smoothly as you would like, outsourcing frees up staff to pursue value added activities that have a positive effect on the business. Outsourcing provides a smooth process each week.
Many businesses worry that they will lose control over function and important data if they switch to using an outsourcing company for payroll. Using a payroll outsourcing service does not have to be risky. With cloud-based solutions, HR or finance directors get more, not less control of data. There is strong risk-management and cost control. They have the ability to interact with the system with user-friendly interfaces that are accessible anyplace, anytime. Employees can access online payslips and tax information. IT risks and costs can be lowered. There will no longer be a need to support payroll software or to store data. There is a built-in scalability using outsourcing and the cloud.
The most positive outcome of payroll outsourcing is that it frees up people to carry out value added activities that have a positive effect on business.