Published on February 10th, 2017 | by Day Trader
The Benefits to Outsourcing Payroll
If you run or own a business, you probably know how challenging managing payroll operations can be. This is not just a question of cutting cheques for staff every week or month. Payroll providers handle a lot more than that. This is the reason so many companies find it makes more sense to outsource payroll processing and HR management. Here are some reasons for this decision:
- A professional payroll provider will keep you in compliance with all governmental regulations. For the most part, people who own businesses are not always knowledgeable about the rules and regulations that govern payroll taxes. The rub is that they are still expected to comply with a complicated array of rules and regulations in this area. If any companies fall out of compliance, the consequences can be dire and very costly. Unfortunately, it is easy to make mistakes in this area. As a consequence, businesses are audited and fined, when mistakes are made. No business, bog or small, wants this result. It has been reported that as many as 40% of businesses can be fined by tax agencies. These complicated rules and regulations are not fixed and they change on a regular basis. When a professional payroll provider is used, the business owner can be confident that they are in compliance with these rules.
- It saves a lot of time. Payroll takes a lot of time. Again, this is not just a question tallying hours and cutting cheques. There are are a lot of t’s to cross and i’s to dot. All of the time that a business owner or manager spends working on payroll issues is time they are not spending growing the business and doing the job they were hired to do. Data has to be entered and checked. This is labor and time intensive. Hiring an outsourced payroll service saves companies all of this time and effort freeing people up to do what they need to do to keep the business operating at maximum efficiency.
- It costs less money. This may be counterintuitive as many think that handling payroll in house is going to be cheaper. If there are already people working for the company, they can handle it, right? Yes and no. There are a lot of steps involved in handling payroll. Unless a business has a dedicated human resources department, a staff member has to take time from their other duties to do this. Conversely, hiring one person to handle payroll is very costly. Payroll providers can handle the calculating of the payroll every pay period, print the cheques, create reports for each payroll period and prepare the paperwork for relevant government agencies. At the end of the day, it costs less to go with a payroll service company than to take care of this in house.
- Using payroll providers increases security. There is a lot of very personal information that is involved in the payroll process. It does not matter how much you trust the employees you task with handling payroll processing, identity theft is always possible. Other pitfalls can include embezzlement and company data tampering. A disgruntled employee can do a lot of damage when they have access to the information that is included in the payroll. It is much easier to keep all of that data totally confidential when you use a payroll provider. They can also help you make sure your data does not get lost when you have an issue with your computer network, which can happen. They maintain client data on several servers to allow for more secure backup, something most companies do not do. It is hard to find a more secure way to store your payroll data than with a payroll provider.
- Their staff are experts at this. When it comes to payroll, you want experts at the wheel. That is exactly what you get when you deal with a payroll provider. They know the payroll rules and regulations inside and out. This is what they are trained to do and what they have experience doing. Because payroll processing is all that they do, the number of mistakes they make is almost zero. You will get a guarantee that their work will be 100% correct, every payroll period.