The Benefit of Payroll Outsourcing to your Business
Support functions grow as the business keeps growing. It is not easy to keep up with these growing needs and sometimes the smart way out is to outsource some non-core functions. By outsourcing your payroll function, organizations are able to focus more on core processes and strategies to saddle the future of the business to a greater destination. In the next two paragraphs, we are going to be sharing with you insightful and research data on why it is beneficial to outsource your payroll functions.
In order to stay away from unnecessary stress and avoid complaint issues, business owners prefer to outsource their payroll work. According to the recent analysis we conducted, 15% of small business owners outsource payroll activities to stay abreast of their payroll process.
Nearly 75% of the businesses we serve outsource their payroll on the demand for an expert to handle their payroll processing, in addition, our clients feel that would spend better time working on other strategic demands of their business with payroll functions outsourced – According to our payroll experts,
Over 40% of business pays penalty or fines per year for late or incorrect filings and payments. According to a recent survey, 33% of businesses incur unbudgeted expenses related to non-compliance with government regulations and of all these companies that were hard hit, these were companies that process payroll in-house. – https://blog.accuchex.com/
For many enterprise and small businesses, processing payroll can be a tedious and entangling task payroll outsourcing offers an attractive and valuable alternative manual bookkeeping, in-house payroll processing and administration. If chosen correctly, they provide a less expensive, simpler means of paying your employees, filing your taxes, withholding taxes, updating vacation and other employees contributed payments for benefits, sick pay, HMO deductions and performing a host of other duties. Therefore, you can save a lot of cost, time and money by outsourcing payroll service.
Every year the IRS penalizes small businesses billions of dollars because of payroll errors. To manage your payroll by yourself, you need to understand hundreds of tax codes and payroll regulations. A small mistake can cause you overpayments, making things costlier during tax time. Managing the business as the business owner and you are trying to do payroll yourself, you have to spend a lot of time. For many organizations with multiple staff, payroll is one of the most time-consuming tasks. Payroll processing is really tedious work. While most of the Nigerian businesses prefer to process paychecks internally, but this is not always cost-effective. Outsourcing payroll processing enables you to focus on processes and the strategies that directly affect the future of your business. Organizations are undoubtedly looking for not only cost-effective solutions but also in search of a support solution that can save time and allow them to focus on their core business and competence.
What Is Payroll Outsourcing?
Payroll processing is an integral part of every organization and today’s payroll outsourcing provider are completing task automatically making HR professional and organization more productive. No matter the size or nature of a company, they need to have its’ payroll computed every month. The Payroll process is a very crucial and complicated task that requires an enormous amount of time to complete it. Payroll is all about how you reward and retain your employees, compensation and benefits for the job they have done. Considering how tedious the payroll task, if errors occur due to miscalculation organizations wind up with unsatisfied and unmotivated employees. To overcome this situation and to avoid such unnecessary tensions payroll outsourcing is one of the best options to handle this job efficiently.
Businesses may decide to hire a third-party firm to handle all payroll functions to save time and cost, reducing the need for in-house trained payroll personnel, purchasing and maintaining appropriate software, staying compliant with updated PAYE legislation. Instead of putting their company resources towards a payroll department, these businesses will hire an external firm to manage the details. They will handle similar duties on your behalf: they calculate payroll, provide management reports, set up automatic check signatures and direct deposit, and manage legal compliance and tax filing. They may even offer tie-ins with HR-related tasks. Payroll outsourcing offers an alternative to those smaller businesses that don’t readily have the resources or expertise to keep a large team in house. That’s why an increasing number of businesses are handing their payroll function to professional providers who offer comprehensive managed payroll functions. Even the most experienced professionals think that payroll can be a headache and a time-consuming task.
How It Works (Updated 2020)
The find step is to research, find and select a payroll provider, it’s time to set up your new payroll system. One of the first steps will be to prepare and send a payroll report, which is set up between you and the provider. Payroll Outsourcing Providers will use this report to process your company’s payroll information. This is used to collect data such as the number of employees, the hours worked, vacation pay and benefits policies, and more, in order to calculate payroll. The payroll vendor will be able to input that information into their system and begin determining your company’s payroll. After you’ve sent the necessary information to the payroll outsourcing firm, your job is done. With this information, they can then look after details like compliance, payroll tax remittance, disbursement and reporting. The firm will take care of handling and administrating payroll, while you can regain time, money, peace of mind and focus on your business core competence entrusting your payroll administration to experts. With clear payroll goals and a better understanding of your needs, it becomes easier for payroll partner to offer the right solutions for your business.
What are the Benefits of Outsourcing Payroll Service?
The tedious and complexity of handling your payroll functions are compelling reasons to explore the benefits of outsourcing. Here are the top reasons your business should outsource their payroll processing functions to payroll outsourcing vendors. Apart from the time and cost-saving, the following are the benefits of payroll outsourcing:
The Advantages of Outsourcing a Payroll Function?
Outsourced payroll saves time
Outsourcing payroll processes enables business owners to focus on core functions. Keeping track of remunerations, benefit deductions, garnishment, new hires and termination, paid time off, over-time as well as state and federal regulation changes can be frustrating and time-consuming. By hiring a third-party payroll service provider, you save time in keeping your finances in check, especially the wages and taxes of your employees. Handling your payroll in-house requires a lot of time and attention, that demand on your time increase as your staff strength increase, by outsourcing your payroll, you immediately free up precious time. That is time away from the core tasks that help you manage and make informed decisions needed to grow your business. You can now devote that free time to other strategic functions that help improve workflow efficiencies.
Significant Cost Saving
The direct cost of processing your payroll in-house can be greatly reduced working with a payroll provider. However, small/medium-sized business owner. Having an in-house payroll process is cost center. Do the math. Figure out the amount of time consumed when you handle this task yourself or when an employee is devoted to your payroll-related activities in-house, cost of calculating payroll each time period, printing, signing, distributing pay-slips, payroll software and program maintenance and upgrade, training and support, keeping up with changes in tax rate/laws, preparing and remitting payroll taxes and returns, report generation. Calculate how much you are spending and compare the cost to when you outsource to a payroll service provider. You will probably be surprised by the result. If you outsource your payroll, you do not have to worry about your provider calling in sick, resigning, wanting to take a vacation and you will see it is extremely cost saving when you take those tasks off your desk. Outsourcing your payroll helps in reducing overhead cost of operation and help business owners maintain business focus. One of the known benefits of outsourcing is cost reduction, and it still holds true. It offers automated processes and allows clients to acquire services in increments.
Increased Employees Involvement and Motivation
For companies to sustain the trust of its’ employees, business owners, with the many things that they need to attend to, should see to the prompt processing and payment of salaries. It’s vital that they feel good and about the returns of their hard work which will pose as their motivation to do better. This can then lead to an increase in production, employee involvement and in the long run, increased net income for the company. Payroll, being an important aspect of employee motivation, is something that should not be taken for granted. It is the fuel that enables employees to still do their job and perform their responsibilities well. It includes not just the processing of basic wage, but also the overtime fees, allowances, bonuses, and other benefits, along with the taxes and other deductions. It’s one of the top priorities of every business which ought to be given to employees on time and in the right amount.
The unnecessary hassles or headaches that accompany payroll services can likewise be eliminated when it’s outsourced. You will more time to pay attention to the other important facets of the business such as product development, advertising, and sales aspects, daily operations, employee training and development, among others.
Builds Strong Relations with Employees
Although people do work for their money, more importantly, they go above and beyond for respect and recognition. Employee relations can make or break an organization and part of building a strong employee relation is prompt payment of their salary. Initiating payments, salaries, and bonuses on time are always important for employees. Outsourcing your payroll helps you to make all the payments timely. It will also help keep the employee’s morale high and improve your business’s productivity.
Federal and State Compliance
Keeping abreast of state, federal, local and industry-specific regulations can be really challenging. To avoid defaulting and penalties of errors, omissions or late tax filing, businesses need to follow all the federal & state payroll and tax rules. With the always-changing regulations; if you are not familiar with these regulations, a small mistake can leave you open to audit.
However, outsourcing payroll means to hand over your work into the hands of professionals and ensure access to expert help. They have staff dedicated to keeping up-to-date with the new rules and changes in tax rates. So outsourcing payroll services is a beneficial option for you to save your hard-earned money, ensuring you stay in compliance.
Access to Technology
Businesses are constantly worried whether they have the latest version of their payroll software and the most recent tax table installed on their computer. Working with the right outsourcing firm will enable you to access the latest payroll software. The ongoing paying of the maintenance fee and the fixed cost of upgrading the software, outsourcing payroll will remove those worries and costs and keeps payroll running smoothly. Outsourcing your payroll help avoid technology advancement costs by ensuring you constantly have access to the latest payroll software and technology.
Security and Data security
There is always a risk of data theft for personal gain with in-house payroll management. The door is wide open for identity theft, employee records can be viewed and monitored by those who handle payroll. Aside from these people’s risk, you will also need to consider the security of your payroll software, data and server security. However, payroll outsourcing is a safe haven for confidential data because your vendor is not interested in your personal data. Your data is stored on highly-secure servers that use cutting-edge technology, along with redundant data backups. To have the same level of security on-site, you will need to spend a significant amount of capital meanwhile, with payroll outsourcing, you have data security and you are able to save up money for a more important aspect of the business.
Keep you up-to-date
You get to obtain all the accounting & payroll related information regularly with outsourced payroll. With outsourced payroll services, you typically get a variety of services and the benefit of an entire organization with first-hand updated information. It’s their business to keep up with the rules, regulations, changes in tax law, guarantee accuracy and compliance ensuring you are up-to-date affordably. In this way, you can stay updated regarding accounting status that helps you make important decisions for the future of your business.
Outsourcing your payroll process to professional payroll outsourcing companies can definitely help control any possible fraud by employees of your organization. The service providers are answerable for every transaction processing as well as maintaining quality and control accuracy.
Expert Advice from Professional
Payroll processing companies hire professional and experienced payroll experts to do your payroll. You can get consultancy and tips regarding payroll services during the expansion of the company. All payroll and potential accounting and related statistics can be obtained on a regular basis from professional service providers handling outsourced accounting services. In addition, advanced software can help businesses look at tailored reports that can save a lot of time while making important business decisions. Payroll service providers will always have access to readily available talent that is not within reach domestically and at much lower costs. Outsourcing your payroll gives you access to the skills that you need.
Reduced Manual Errors
Errors in payroll often result in hefty fines. Apart from having to dedicate time to writing checks, managers need to oversee the payroll taxes, withholdings, insurance, profit-sharing, and 401(k). Outsourcing to payroll service providers ensures minimal manual errors as they use automated tools to perform the tasks.
Mobile (accessible) Monitoring
Executives are known to always be on the go and being able to access payroll processes through mobile devices is a huge plus.
Simplify Payroll Management the help of our Payroll Expert
Outsourcing payroll administration to a Professional Outsourcing Organization can help you ease the burden of managing payroll for your business. ICS Outsourcing can help you handle all the important financial details, allowing your business to effectively manage payroll and stay compliant. Contact one of our experts today to talk about how outsourcing payroll administration can benefit your business.
Want to grow your business faster? Start outsourcing your most tedious back-office tasks.