When it comes to doing in-house payroll, many businesses are opting to outsource their payroll. There are just too many benefits of using payroll services for companies to ignore.
Whether a business has a small or large staff, taking care of payroll requires a lot of time and a great attention to detail. Every time the pay period rolls around, business owners must input substantial amounts of data and check for any errors. The task of payroll takes away precious time from other important business tasks, such as developing growth strategies and meeting with clients. Outsourcing this function gives business owners more time to focus on other daily business demands.
Time is money. When outsourcing payroll services, businesses save cash. Calculating payroll each pay period, printing paychecks, generating reports for accountant and in-house use and preparing payroll taxes and returns all adds up to time that equals money. It’s this time-cost analysis that proves outsourcing payroll ramps up the bottom line. Outsourcing payroll typically costs half of what it would cost to do it in-house. It also eliminates the need to hire a full-time payroll manager.
Payroll processing is not only complex, but it’s risky. There is always the risk of tampering with company records for personal gain, embezzlement of funds or identity theft. Even with payroll software, there’s a risk. How safe is the payroll data and confidential information on the company’s network or server? With a qualified payroll provider, businesses get secure storage for payroll information in addition to backup.
Most business owners aren’t experts in the complex world of government tax regulations. At the same time, business owners are legally responsible for any inaccurate reported state and federal taxes. Even simple mistakes can lead to penalties and audits. Plus, it’s difficult for companies to stay on top of the ever-changing rules and regulations. On the flip side, professional payroll providers are required to stay current with the government regulations, rules and tax rate changes. As a matter of fact, most payroll services assume responsibility for penalties and legal fees resulting from incorrect filing.
Convenience and Functionality
With outside payroll services, business owners can simply call the payroll provider and give them the hours, deductions and salary amounts. The firm then processes the check. Most payroll services also allow companies to update payroll data on its websites. Plus, many payroll companies handle direct deposits and employee retirement plans. Get management reports, calculations for tax obligations and prepared W2 forms for employees. With payroll providers, it’s easy to get comprehensive payroll services along with augmented services, such as deducting employee-contributed payments for benefits and updating vacation and sick pay.
While outsourcing payroll services comes along with many benefits, it’s important to choose wisely. Get at least three quotes before deciding on a payroll service. You should also speak with other business owners to find out who they outsource their payroll to and find out if they’re satisfied with the service.