If you own a business or work as a high-level executive for a company, chances are sooner or later you’ll have to make a decision about how your company handles paying its employees. Yes, when you hired your workers, they agreed to either an hourly wage or salary – we’re not talking about that. We’re talking specifically about the means behind the scenes as it pertains to how your workers get paid. Yes, we’re talking about payroll.
Payroll is complicated. It’s also time consuming. And that’s exactly why outsourcing payroll to a specialty service firm might be in the best interest of your company. Here’s a closer look at some of the benefits of outsourcing with a payroll service:
- Cost Savings: The cost of using most payroll services is about $3 per paycheck. And while that might seem high, that’s hardly comparable in most cases to the resources that a company would have to utilize or the money that a company would have to spend to bring such services in house. Generally speaking, it’s estimated that outsourcing payroll can cost about half of what it would cost to bring it in house. That’s quite the cost savings. Aside from this, there’s also the potential cost savings as it pertains to IRS penalties. It’s estimated that nearly half of all small businesses have to pay an $845 annual penalty for late or incorrect filings from payroll gone wrong.
- Accuracy: If you’re giving it a go at payroll yourself, and have little to no experience or are lacking the right professional on staff, you’re more likely to make mistakes. And then there’s the ever changing tax laws and regulations that you have to be following and making adjustments accordingly. That’s another big benefit of hiring a payroll company to complete this task for you – not only are they experts when it comes to payroll, but you’re their client, so they’re working for you to meet your needs and keep your business.
- Convenience: You’re in the position that you’re at in your company because you’re obviously qualified for it and do a good job at it. Adding payroll to your company’s repertoire can actually be a distraction. Say that you take on payroll and have to allocate 30 percent of your time to it. That’s 30 percent of your time that you’re not spending on running your business. And yes, you can always assign someone else to do payroll at your company, but that too could prevent them from working on tasks that are much more important to the business and that they’re more qualified to do. Outsourcing payroll is convenient in this regard, as you can spend more time on your business – not on tedious, complicated tasks like payroll that can slow down its growth.
- Direct deposit: It’s difficult for most companies that do payroll in house to offer direct deposit to their employees. And direct deposit is beneficial for a variety of reasons, most notably because it’s extremely convenient in that it saves employees a trip to the bank. It also eliminates any paper handling of physical checks. Can you imagine having to deposit paper checks at a brick and mortar bank branch location every pay period? Neither can we.
Just as you’re an expert in managing your company and leading its growth, payroll services are experts in making sure your employees get paid correctly and conveniently. And when you factor in the cost and time savings of outsourcing payroll versus bringing it in house, you can see why it makes sense to contract with a payroll service firm.