The payroll department of any business is unfortunately a drag on the overall productivity of that business. This is not a condemnation of the individuals who work in payroll departments, it is simply a mathematical fact of business. The payroll department does not generate revenue and actually burns money.
What Is The True Cost Of A Payroll Department?
The answer to this question is going to depend directly on the size of the business and the type of payroll. One source estimated it as:
The direct costs of processing payroll can be greatly reduced by working with a payroll provider. Our research indicates that a small business with 10 employees will typically spend $2,600 per year in direct labor costs associated with payroll.
This comes down to $260 per year per employee. Those are huge costs! Cost reduction comes by outsourcing payroll services to another company to handle it for you.
Using An Outsourced Provider
Outsourced check issuing providers are a tremendous help to the over stressed business owner. These providers work for a lot less than the estimated $260 per employee per year. Generally, they will work on a flat fee basis or a fee based on the exact services that they provide.
Outsourced partners have to make sure that they keep costs low in order to continue to attract business. Since payroll and related services are the only things that they do, these partners can streamline everything and keep overhead low.
Bring Greater Productivity And Energy To The Business
Enhanced productivity and energy are two rewards that one can immediately see from outsourced partners. The payroll department’s elimination means that those formerly working in payroll can take on new assignments. That is a lot of creative energy that is now transferred to other departments.
All of these great things can happen by simply outsourcing payroll services to another company.