Outsourcing your payroll will make things incredibly more convenient for your business, and if you haven’t already considered doing so, then maybe it’s about time to start.
Even if your company handles payroll in-house, integrating an external payroll system will still be easy, yet, people hesitate to do so. They’re protective of their wage information and hesitant to give them to anyone outside the company. They also think it’s unnecessary to invest money and time in it. Why should you hire someone to do something you could probably do well yourself? What some people are unaware of is there are actually a whole lot of good benefits to outsourcing your payroll.
What Outsourcing Payroll Can Do for You
Anyone who has personally handled a company’s payroll can attest to the amount of time and work it takes up. Calculating an employees’ additional taxes is difficult, especially if you have to do it for every individual of a big company, and withholding taxes may also vary from employer to employer. Payroll companies will handle all of that for you.
They calculate the salary of every employee themselves. This includes calculating withholding tax, sending those taxes to the appropriate government agencies, issuing the actual paycheck, and then depositing an employee’s net pay into their respective bank accounts. Other automatic deductions, like health insurance, are also included in these calculations.
Your company may not also be aware of any potential changes in tax amounts. Payroll companies keep track of this, and a company that misses these changes may make a mistake calculating taxes, which could result in penalties for incomplete or late tax payment.
They’re in charge of taking note of employees’ attendance, overtime, and undertime, and the necessary compensations and deductions. They can provide you with all required government forms. Many use software systems integrated with apps that employers can use to see a detailed a detailed breakdown and report of all their employees’ salaries. The employees themselves can see a breakdown of their own net pays as well.
You can count on payroll companies for security. You’ll have full access to your payroll system and records, and detailed reports of all your employees’ salaries. This information is always kept safe, and you won’t need to worry about managing, maintaining, and upgrading your own payroll system, because the right payroll company will reliably do that for you.
Outsourcing payroll may even save you a lot of money. Big companies can afford to have their own in-house payroll system, but smaller companies with fewer employees will have a harder time, and may even end up spending more.
Compute how many hours your employees devote to just your payroll, and how much resources and hours in a day they use up, and compare that to the price of services outsourced payrolls offer. Many payroll companies offer different plans, depending on the size of your company.
Your in-house payroll function uses staff, and if they aren’t exclusively in charge of that or aren’t properly trained to handle payroll, they can make mistakes. With a fully trained team, you’re assured your payroll will be handled properly. And even if your company ends up spending extra, you save a lot of time in exchange.
More Time to Focus on Your Real Work
Payroll is one of the most basic necessities for any company to work. It’s important. However, handling a company’s payroll doesn’t generate income, and the same goes for other administrative processes like human resources and accounting. Such processes, called non-core functions, are necessary for a company to function, but they aren’t part of a business’ core. This is why people choose to let other companies do certain non-core functions for them. The less time they have to spend on those, the more time they can spend focusing on their own business.
Companies can spend as much as 6-8 hours a month exclusively on in-house payroll, and that uses up people’s time. While you have a whole set of people who could be working on something more valuable to a company’s growth, other companies are paying someone else to do payroll for them.
Imagine getting your pay late, or all your employees getting their pay late. A company is just as responsible for taking care of their employees as running their business. Outsourcing your payroll reduces the risk of any unnecessary mistakes from happening. When you outsource, you have a full body of people who can completely focus and devote their time to the complicated process of employee payroll, and make sure employees get their pay on time, of course.