Every business has its own way of handling payroll tasks. Some will choose to have an in-house team for the job; others opt for payroll software, while others prefer to outsource their payroll to professionals. When determining whether to outsource or do it yourself, there are many considerations to make, such as the amount of time, resources, and effort required to get the job done correctly and on time. Payroll comes with its demands that can easily stress you out if you are not organized enough.
In most cases, it doesn’t matter the number of employees you have, as there are many demands that come along with handling payroll. Some of these demands include filing federal and state-mandated forms on time and keeping up with tax laws and deposit rules to avoid getting penalized. That’s why many business owners are left weighing their options.
However, before making any decisions, it’s essential that you go through several considerations before making up your mind. Keep reading the article to understand why you should outsource payroll to specialists.
What are your options to Run Payroll?
There are three main ways to run payroll. You can choose to do it manually, use payroll software, or outsource.
Every method has its own pros and cons that you need to deal with. For instance,
- Doing it manually means no payroll service provider fees, but quite risky as you’re likely to deal with errors. Additionally, it’s not easy to stay up to date with payroll legislation, meaning staying alert about tax and employment law changes.
- On the other hand, payroll software is cost-effective, especially if your business is growing. However, you need to know how to operate the software or have someone who does if you don’t have payroll expertise.
- Finally, if you want error-free work and peace of mind, simply outsource the work to experts/specialists. Outsourcing payroll saves your time, reduces overhead cost as well as prevents IRS penalties and mistakes. Let’s discuss them in the next sections.
How much time do you have?
Everything about business revolves around time. Every minute wasted is money lost, and business people know this phrase better. Therefore, when you are going through your options, you must pay attention to the amount of time you will save on payroll tasks.
Payroll demands time, attention to detail, and keenness. There is no room for mistakes which comes at the cost of valuable time that would have been spent on money-making activities and business priorities such as serving customers.
So, when you outsource your payroll, you automatically shift the burden to the outsourced payroll processing company, and you have more time to focus on what matters in your business. Hiring an in-house team means taking your time to interview, hire and train employees. It also means giving allowances and other employee benefits while also spending on machines and furniture for the team.
Which activities in your Payroll take the most time?
You also need to determine which responsibilities take the most time, especially if you have experts in your team to handle payroll for you. With every new employee in the business, payroll responsibility also gets bigger. Payroll processing complexities may require a substantial amount of time on some aspects, such as generating in-house reports, calculating payroll amounts, or preparing and remitting state and federal payroll taxes and returns.
So,think critically about each process and determine whether you have enough time to allocate these tasks.
What mistakes are likely to occur?
Payroll mistakes can be quite costly and frustrating for both employees and employers. Improper pay rates or missed hours can inadvertently reduce an employee’s pay which causes lasting resentment and frustration. Such mistakes can affect your employees negatively and even lead to poor productivity.
Similarly, payroll mistakes can lead to hefty fines and penalties for employers, especially for improperly calculated taxes. As a business owner, your main focus is customer attraction and retention, not payroll.
Instead of wasting time trying to keep yourself updated with tax regulations and spending long hours going through documents to ensure accurate representation, hire experts to do the work for you. In this way, you can save that time for more pressing business issues.
What are the chances of securing data?
With in-house payroll software, there are certain risks in data security. Such as identity theft, tampering with company’s files for personal leverage, data fraud, misuse of funds etc., are some potential risks in business operation.
In a word, employees’ confidential information can easily be accessed by whoever handles the company’s payroll. Not to mention, the company’s server or network is also not very reliable to keep payroll data protected.
But thankfully, the outsourcing payroll process implements secured technology that alerts and notifies you about payroll frauds in real-time. A quality payroll service provider ensures storing and protecting data along with multiple server locations, redundant data backups and stronger encryption technology.
Do professional payroll providers guarantees compliance?
You’ll be wondered to know why most small to larger businesses outsource payroll. It not only for saving time, energy, cost or security. It’s about avoiding compliance risks.
Compliance in businesses basically refers to following the laws and regulations about the industry. Failing that leads to potential exposure to financial loss, material loss and legal penalties. Almost 35% of businesses have admitted that compliance is the biggest challenge in payroll management. It’s said that the company’s HR team spends 36 hours a week on compliance-related actions.
Whereas outsource payroll specialists can save you from such troubles. They will provide the HR team with efficient and accurate payroll data while following the regulatory standards. Consequently, you don’t need to worry about compliance issues and can focus on business growth properly.
Get Peace of Mind
Leave all work to the professionals and get rid of all headaches and hassles with outsourcing the payroll. You can stay in peace by ensuring error-free, penalty-free payroll and tax submission. In addition, the company data will be safe. So, you can actively concentrate only on business goals to achieve.