Benefits of an outsourced payroll service
Every business that has employees is obligated to carefully calculate employees pay in order to ensure they receive their paychecks on time, and that they are accurate. There’s also a myriad of deductions that must be managed such as taxes, health insurance and similar items. Some businesses choose to keep these tasks in-house, hiring a bookkeeper and support staff, thinking they will have more control over the process and that it will save the company money. The truth is, the benefits of an outsourced payroll service far outweigh the benefits of maintaining payroll in-house.
1. Time Savings
Payroll is a time-consuming task that requires a great deal of attention to detail. And, the more employees a company has, the longer the process takes every pay period. It’s not just the time that an employee spends calculating and producing paychecks either, there are also federal, state and sometimes local taxes to contend with. In most cases, the business owner acts as a supervisor, double-checking the work to ensure everything is done correctly. Outsourced payroll services eliminate all of the tasks associated with payroll processing, leaving more time to focus on other, more critical tasks.
2. Decreased Expenses
Hiring in-house causes a burden on a companies financial, and human resources. There are, of course, advertisement fees and other costs associated with recruitment activities. Once an employee is hired, they need to be trained in company procedures to bring them up to speed on their job description and expectations of management. Let’s not forget about the payroll employees salary and benefits. The costs don’t stop there, though. They also need a space to work, furniture, equipment and supplies. When payroll is outsourced, the payroll company covers all of these employee-related expenses.
3. Avoid Tax Penalties
Most business owners are not experts in federal, state and local tax laws. It’s no wonder since the tax code is continually changing it’s difficult to keep up, unless you’re an expert that receives ongoing training. Companies that process their own payroll face stiff penalties for improperly filling out paperwork, missing filing deadlines, and inaccurate filings. However, those that outsource rest assured that the payroll company will keep them safe from these issues. They have a deep, vast knowledge of the tax codes, including recent changes and they take on all the compliance responsibilities.
4. Improved Security
Payroll processing involves the use of a great deal of personal information about employees, as well as access to company financial data. While a company’s employees may be reliable, trustworthy and dedicated, there are inherent security risks when they handle payroll in-house. Among the top concerns are identity theft, tampering with vital company data and financial fraud. Professional payroll firms have measures in place to protect against these types of security concerns, and offer detailed reports to track every aspect of the process.
5. Expert Services
Payroll processing companies employ a staff of highly-trained professionals that are experts in a multitude of different areas. They stay abreast of new developments, laws and requirements for payroll taxes, healthcare deductions, overtime pay and more. They can, and do, act as consultants to companies, offering sound advice as to proper procedures regarding employee compensation. This level of expertise is indispensable for businesses, keeping them out of trouble with the government, and ensuring all employees are treated fairly with regards to their pay and withholding.
If you’re a business owner who maintains an in-house payroll department, consider the benefits of outsourcing mentioned above. If you have any questions about payroll processing, or if you’d like to learn more about how outsourcing works, please contact us. We will be very happy to talk to you about this important issue anytime.