At your company, there are several tasks that must be accomplished like clockwork. Payroll is one of them. Your employees trust you. Their assumption is that they are going to receive payment for their services on time, every time. While this can seem overwhelming, keep in mind that any department in your company can be outsourced. Different circumstances and sizes determine whether it is more cost-effective to complete tasks in-house or out. Here are a few top benefits of outsourcing payroll.
What Is Outsourcing Payroll?
When a task is outsourced, it means that you are delegating the responsibility to someone else. In the business world, this has become far more common over the last decade. Outsourcing payroll means that you pay another company to complete it for your business. Usually, the company you hire to complete your payroll specializes in it. It is their focus, so they are more likely to deliver a stellar product.
Our company, for example, specializes in online check writing and mailing services. We work with accounts payable services, refund management and patient statement services, among others. These kinds of financial services are our focus, so we are experts in these areas. Our knowledge affords us the opportunity to streamline processes.
Why Outsource Payroll?
Companies and professionals opt to outsource payroll for different reasons. Enterprise-sized companies do it for legal purposes even though they can handle the demand. Small companies do it because they do not have the staff. Outsourcing payroll frees up staff. They can put greater focus on tasks that are generating income instead of those that require it. Processing payroll and solid record-keeping ensure that you keep your promise of payment to your employees. Additionally, you remain in compliance with laws and regulations.
Benefits of Outsourcing Payroll
The reason why outsourcing remains a commonplace practice in the business world is that it is beneficial. Sometimes it is out of necessity, and other times it is convenient. Often, it provides at least the following benefits:
- Saves time
- Saves money
- Helps your company keep up with changing laws
- Enhances security
- Provides professional expertise
Every labor hour that your staff spends on tasks that do not generate revenue is technically a lost hour. When you put together a staff and various departments, you know that every hour is not going to be maximized revenue-wise. There is paperwork to complete, and there is other busywork that has to get done, too. Paper trails are important. When you hand over your payroll duties to an expert in the field, it saves you time.
All the administrative duties that are part of payroll become someone else’s job. Payroll is a massive responsibility. It has to be completed correctly the first time, on time, every time. Even one mistake can cause a negative domino effect.
Professional payroll processing companies take everything behind the curtain. What you see is the finished product. Your staff no longer has to spend hours processing time sheets, double-checking each other’s math or ensuring that the checks made it to the recipients on time.
Thanks to the internet, technology and software, all the details of your company’s payroll are safely placed online. You receive unlimited access to the information as long as you correctly log in to your account. If an employee is missing a few dollars or their deposit has not arrived, you can track it online. It may be that everything is OK, but there was a miscommunication about the details.
Outsourcing took off because companies found out that they could save money. This is why it continues to be popular. One person or a staff of a few people might take care of the payroll for your company. While they are going through the process, you are paying them a wage, and often insurance and taxes. When you delegate the task to a specialist, your overhead goes down. That overhead becomes the responsibility of the outsourcing payroll company because it is their employees, not yours, processing the payroll. All you do is negotiate a contract and the fee.
Technology has made it possible to streamline the process even though you outsourced it. An outsourcing payroll company uses strategies that allow them to be efficient. Efficiency means they can handle a larger workload. So, it is in their best interest to deliver a result that goes above your expectations.
Keep Up With Changing Laws
Tax and financial laws in the United States tend to change on an annual basis. Sometimes the tweaks are minor, but if you do not abide by them, you could land yourself in hot water topped off by a fine. An outsourcing payroll company stays on top of changes made to these kinds of laws because it directly impacts them, too. Of course, it impacts their clients as well.
Companies that specialize in processing payroll also complete any reporting you require like end-of-year taxes. These reports are what you send to the appropriate government agencies, so they have to be correct, up to date and meet reporting requirements. The goal is to ensure that everything is transparent. Stellar reports mean that you are less likely to be flagged for an audit. If you are flagged, your reports will be organized so that the audit is as stress-free as possible.
Your staff can very well handle the processing as well as keep up with changing laws and the year-end reports. By freeing up these man-hours, though, you can focus their attention on more profitable duties.
The internet has changed the way companies do business. Business operations are moving online and to the cloud. This means that you have less paper copies that require physical storage. This frees up office space, too. It also makes important documents safer. Your payroll documents and information have to be kept safe and secure. When you partner with outsourced payroll services, you are paying for the service. You are also paying for enhanced security. This company has to keep its client’s information safe. It is in their best interest to do so. If you believe that your payroll information is secure, you are going to stick with that company. Plus, you may refer them to others, which is a win-win.
Every company handles security differently. Before you hire someone, ask them about enhanced security. This way, you will have peace of mind.
Handing a task to a professional is a weight off your shoulders. Professional expertise is worth the fee because you know that the final product will be error-free. Plus, you may be able to gain worthwhile knowledge due to their industry expertise.
What Is the Payroll Outsourcing Cost?
The payroll outsourcing cost depends on a few factors. The load is one. The frequency is another. If you are a small company, you have few employees, so processing your payroll is not a heavy load. An enterprise company, on the other hand, has more demands simply due to size. If you are a small company, one nice bonus is that outsourced payroll services can scale.
Getting your company’s payroll done can be accomplished in several different ways. It is up to you to pick the method you believe works best for your needs. Outsourcing the task is common and offers several benefits. If you have any questions, feel free to reach out to us at Checkissuing.com.