Most business owners grew up with the notion that outsourcing means you are just paying extra for the convenience and nothing else. While yes, convenience is one of the benefits of outsourcing, it isn’t the only thing you can get. And in most cases, outsourcing could become a cost effective solution in the long run – both in time and financial aspects.
Time is a precious resource and is a great equalizer because it is a fact the every living thing in this world will only have 24 hours a day to use. For businesses, with so many tasks and functions that should be attended to, say, in 8 to 12 hours a day, it would be a breath of relief to outsource its non-core tasks to focus on the true nature and purpose of its business. Payroll services are some of viable options to outsource, considering how time consuming, tedious, but equally important it is for businesses.
Is It Really Worth It?
So you would ask, is it really worth the effort to look for payroll processing companies? How payroll services work? Will it make any difference from my current in-house payroll processing? Will it benefit my business long term? Outsourcing payroll services is also a matter of trust, as it involves getting a third party service provider that will gain access to your business money for their disposal. Getting the right and reputable payroll processing provider is definitely worth the investments, where the benefits will be discussed later.
Is It Expensive?
In considering costs, it is not just the matter of computing manpower plus wages plus benefits of your in-house payroll team versus the amount to pay for payroll processing providers. There are also other considerations like payroll software, trainings, costs of computers and supplies, tax and payroll mistake liabilities. Add the unquantifiable headaches and stress brought about by observing critical and legal tax regulations and standards imposed by the IRS. Think about how vast are the services that payroll processing companies can give you, and unearth the reasons why outsource your payroll services today.
Is There Anything It Can Do, That I Couldn’t?
None and yes. If your business is payroll processing services, then of course you can do all the accounting and management all day, but unfortunately, you’re not. Payroll processing is not a simple task, especially when your employees are big in number, they have different work schedules, and they come and go. Add the ever-changing rules and regulations when it comes to taxation, manpower laws and payroll management. It is unwise to devote so much time for an important, but non-core task, considering you need first to make a profit so you can give your employee salaries on time.
I’m a Small Business Owner, Do I Need It?
Some businesses couldn’t see yet the value of outsourcing its payroll management because their needs are still straightforward, and their employees are still few in number. But is there a small business owner who doesn’t envision that one day, his business will grow? Anticipating growth to take place the soonest may encourage you to outsource your payroll processing as early as you can, to avoid the headaches of constantly changing your functions to accommodate your growing number of employees and business. It also spares you of incurring mistakes because of inexperience, which may cost you more in fines and charges from the IRS. The Internal Revenue Services in the US reported that one in three employers was charged with penalties from payroll-related mistakes, which may even cost you billions of dollars.
Is There A Technology For Payroll Processing I Can Take Advantage Of?
There is! Now that technology is penetrating every nook and cranny of businesses, payroll processing is not spared of the benefits of automation and technology-assisted management. For some businesses, continuously updating its tools and processes with every latest technology offers can be expensive and tiresome, especially when you need to train again for newer software. Payroll systems can also be effectively integrated with your accounting and HR management, and there are outsource packages which may even include this additional service.
The proliferation of mobile devices and mobile-based technologies are also important trends arising that can support payroll processing. Employees can now see their payslips ahead and online, in which they can approve first before the payroll can process. You can also protect your business from unauthorized use of funds by making every transaction to be viewed online. Business owners can now monitor the actual payroll processing with the help of payroll software which they can access through an application from their mobile smartphones.
Getting the services of a payroll company help your business keep up with these technologies minus the hassles of adopting and re-adopting newer methods. It makes your employees informed of their hours and days worked for, and also give them the transparency of your processes concerning their work and pay. It may keep them motivated and express their trust with their employers.
How Much Time Can I Really Save?
Payroll processing is inherently a tedious task, even though technology has made its way to automate most of its steps and processes. But we are a bit far from embracing full paperless administrative work, causing payroll processing to still incline with the tedious, paper based and time consuming tasks.
Outsourcing payroll processing and management can ease you with these repetitive tasks. In knowing you have an expert back end office that takes care of the important task will lessen your time supervising it. This way, you can concentrate on profit generating aspects of your business while your support system is continuously running.
Having a separate entity to handle all inquiries and questions regarding payroll can also de-congest your office. Employees may ask directly to your payroll processing provider, and can expect also to provide the solutions to their problems and complaints accordingly. It also centralizes document submissions, form distributions and check distribution (if applicable) which will also be convenient for you and your employees.
Does It Adhere to Tax Regulations?
Definitely. The number one benefit of outsourcing your payroll processing is that you can be sure that your business and its employees comply with tax regulations. With hundreds of tax-related compliance standards to learn, it may be hard for you to comply with everything without the right knowledge and understanding of everything included in it. Payroll processing firms employ people who have substantial experience in handling tax implicated tasks such as payroll. This way, you do not need to worry committing costly mistakes when it comes to tax filing and compliance.
Other legal implicated laws concerning tax and employees may be too technical for some, plus the changing laws and additional standards and guidelines each year. This kind of complexity does require an expert to handle well, so as to perform the tasks correctly and aligned to what the laws to avoid penalties, disputes and liabilities.
What Are My Risks?
Some businesses may find that when they outsource, they risk their data and critical company information, even the access to core elements like bank accounts and confidential files. While it is true, you can be confident that outsourcing agencies are still governed by laws protecting from unauthorized and unlawful use of their client’s data other than the purpose favorable to the client. Before getting the services of any provider, make sure that you both sign a legal and mutually agreeable contract stating complete protection of both of your interests.
In reality, payroll processing providers actually minimize your business risk when it comes to payroll administration and its security. According to the Association of Certified Fraud Examiners, payroll fraud actually happens in 27 percent of all businesses. Running it in-house makes it more prone to employee theft, payroll dishonesty, mismatched real time tracking data to that from a time tracking software, and ghost employees. By outsourcing your payroll processing, your employees will have no access to its core system, thereby losing the ability to manipulate it to their own benefit. These payroll processing providers are fully aware that their services are governed by a contract which will stop them from doing unscrupulous work.
Nonetheless, whether you outsource some of your non-core activities, it is still your responsibility to make sure that you get a reputable and trustworthy service provider. With so many options in the market, take your time in evaluating and comparing different providers to know which one will make the best partner for your business.
How to Choose the Right Provider
When choosing the right service provider for you, basically you have to consider these three aspects:
- Its reputation
- The cost
- Its services
Through exhaustive research (online reviews, actual client interviews, meeting up with the provider personally), you will have a better insight about which one will fit your needs, budget and expectations. For the top payroll processing providers, you must also consider the following:
- Security and credibility
You are practically giving out a volume of critical information to them, so you have to make sure that their business is credible in the industry. Research carefully if the provider has been involved with issues in the past. You should also look for a provider that is financially stable on its own, making them less prone to embezzle money from their clients.
- Experience and track record
Since payroll processing deals with legal compliance and tax implications, you must make sure your payroll service provider has the experience and outstanding track record in serving clients with similar industry and needs as yours. This way, you can be assured that they will execute their tasks accurately, and your risks will be minimized.
- Broader services
As your company grows, you may need to extend outsourcing related services like HR and accounting. If you see this coming in the near future, it may be more convenient and cost efficient to get a payroll processing service provider which can also cater to these kind of services.
Check how well a payroll agency keeps itself updated with the latest technological advancements in their field. Is their software and system, mobile ready? Do they assure you that they can keep in pace with your business as it grows and moves towards more advancements?
- Interfacing with your existing accounting and HR system
Payroll, accounting and HR can work hand in hand to guarantee a seamless flow of processes when it comes to employee management. See to it that the system your payroll processing provider matches with what business tools you use, like with a time tracking tool, in order not to have a hindrance to their collaboration.
Get more payroll processing outsourcing tips and benefits from real clients by reading payroll processing provider reviews from CrowdReviews.com.
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