Why should you choose ‘outsourced payroll’ over ‘in-house payroll’?
Organisations are sometimes in two minds whether to have an in-house payroll system or to outsource it. Ideally, payroll outsourcing helps free up time and resources, reduces costs and risks and places the latest technology and expertise within the reach of organisations.
Reasons why you should outsource
Saves Time: Payroll processing demands time and accuracy. The time consumed can be better utilized for other pressing business demands related to increasing revenue.
Reduces Cost to Company: Outsourcing helps you save maintenance and infrastructure costs with ease. It also helps save extra manpower cost.
Improves Accuracy: An employee’s working hours/day has to be verified for accuracy in each payroll cycle. Additions and subtractions are calculated as per their designated pay rate, taxes and actual net pay to be calculated. Accuracy plays a very pivotal role in such complex situations.
Eases Reporting: At the end of the payroll period, all calculations, deductions, payments have to be recorded for future accounting and tax purposes. Many business owners assess previous payroll reports to make hiring and staffing forecasts. Payroll figures also play an important role in tax calculations. At the end of the year, businesses must submit a year-end payroll tax statement that validates each of the quarterly figures and calculates any remaining taxes due.
Eliminates Errors: Payroll errors are exasperating and are expensive for the company. An extra tax deduction, extra payment to an employee, missing work hours cause frustrations to both the employee and employer. It takes significant amount of time and effort to correct those mistakes. For the employer, payroll errors can cause fines and penalties for inaccurately calculated tax obligations. These mistakes can lead to audits and penalty situations that no business owners desire. Even if these errors are caught before they are submitted, they can still cause countless hours of reprocessing employee pay and tax returns.
Provides Better Data Security: Payroll processing is a very intricate activity and in spite of everything, there is likely risk of data theft and misappropriations. Outsourcing provides a safe haven for your company data. In addition to data backups and storage, it also provides enhanced security to the business owner.
Ensures Compliance: Adhering to compliance is obligatory for any business owner. Government rules and regulations often change, and small business owners can’t always stay updated about the latest requirements. Having a provider in hand often helps you feel more confident about staying up-to-date on regulations.
How to Choose a Payroll Provider
Once you are clear about the advantages of outsourcing Payroll, you need to choose the right service provider. Follow the below process to choose the best.
Consider the size of business and the complicacy of the payroll system.
Evaluate the budget and weigh cost saving.
Evaluate compliance and security policies to keep the data secure.
Check Service provider’s accuracy history to avoid any issues later.
Consider how much time the Service Provider needs from the business and the level of support they need.
Whether the payroll data can be integrated with business data for smooth data flow.
Whether they provide self-service options for employees to login and check their information?
How often they update their data to adhere to government rules and regulations?
Will they be able to handle your business’s growing demands?
In fact, choosing in-house payroll or outsourced payroll depends on various factors. In-house payroll is good for business owners who want to have more control over the process. Outsourcing is an option for businesses who are worried about the intricacies and compliances involved in doing payroll themselves and want to trust an expert to provide the perfect solution.