Business leaders may ask themselves, “Can I outsource payroll?” If you find a reliable service with the bandwidth and the right expertise... the answer is a resounding YES!
Here are some keys to understanding why and how to outsource your payroll:
Managing payroll is a necessary but often frustrating task. Heavy compliance and administrative requirements make it a drag on productivity. Calculating taxes, handling direct deposits, filing quarterly returns – it’s complicated, time-consuming work that takes you away from focusing on your real job. But outsourcing payroll services can save you time and money while reducing stress.
Who Is Doing Payroll Now?
Maybe Payroll is in your hands and sucking up your time and energy. Perhaps you have an admin or an accountant doing it. No matter who is doing the heavy lifting, the responsibility for everyone’s pay and benefits is on your shoulders.
Is it being done correctly? Is your payroll process compliant?
Whoever you have doing payroll really needs to have good knowledge of local and state laws as well as the federal requirements. They are going to need to stay on top of changes.
For example, a New Jersey company we just spoke with recently realized that the minimum wage went up in January and they had no idea. They were paying many of their employees below the current minimum wage! Can you say “fines and penalties”?
The Benefits of Outsourcing Payroll
Outsourcing payroll processing provides many advantages compared to managing a payroll function in-house:
Cost Savings – When you outsource payroll, you avoid expenses like software modification, compliance resources, and staffing overhead. Outsourcing the payroll function provides economies of scale that bring significant cost savings. An expert payroll service can do it faster and better for less.
Accuracy – Payroll Specialists have the expertise to handle everything from complex tax calculations to compliance with labor laws. This high level of experience ensures total accuracy.
Time Savings – Payroll processing is extremely time intensive. With payroll outsourcing, you or your staff avoid this huge time drain and can focus on revenue-generating tasks. Do you really think your Controller enjoys running payroll anyway?
Technology Upgrdes – Payroll systems these days utilize advanced Human Capital Management software (HCM) that can provide substantial benefits and efficiencies to your employees. Things loke onboarding and time-off accruals can be automated. These are systems you likely don’t have the time or knowledge to setup and put to good use. A payroll outsourcing service simplifies and automates processes for efficiency.
Reduced Liability – Payroll mistakes can lead to fines for noncompliance. Mistakes also hurt employee morale and engagement. Outsourced payroll reduces your compliance risk exposure significantly.
An outsourced payroll expert can also keep you from creating your own liabilities. A good payroll specialist isn’t going to let you do that thing you want to do… that seems like it should be legal… but they know it is not. Their knowledge and their objectivity as an outside player will be invaluable.
Scalability – As your business flexes, your payroll needs change. A provider can seamlessly scale services up or down to match your needs. You won’t have to worry about hiring more staff or laying off staff in the payroll function.
Reporting Capability – Need a quick census of your employees? Did the CEO just ask for a report of all the employees with a specific license? Want to know your labor cost per department breakdown? Outsourcing Payroll may be the best path to quick and accurate reporting. The specialist knows the system and can run these reports in a flash.
Stability – If your payroll person gets sick or resigns, will payroll get done? A good Payroll outsourcing company will never leave you high and dry. They have backup for their backup.
24/7 Access – The best payroll providers give you and your employees online access to payroll info 24/7. Employees can manage direct deposit, tax info, PTO, and more. An outsourced service will ensure the access and uptime of these HCM systems.
Choosing The Right Payroll Service
Not all payroll services are equal. www.hrconsulting.com recommends that when evaluating providers, you should look for:
- Experience with businesses like yours
- Strong technology and automation knowledge
- A customized approach (not “one-size-fits-all”)
- Excellent customer service ratings
- Strong security protocols and cyber insurance
- Positive reputation and longevity
A trusted payroll expert becomes an invaluable asset. They stay up-to-date on regulations so you can avoid risks. They also analyze data to provide insights into labor costs, overtime, and other metrics that help you manage your bottom line.
Outsourcing Payroll Drives Business Success
Payroll may not be part of your core business operations, but it has a massive impact on your finances, productivity, and employee satisfaction. An experienced payroll outsourcing company handles it seamlessly so you can get back to what matters most – growing your business.