Payroll is an essential part of a business as it’s how they compensate and retain employees. Although there are still some small businesses that opt to handle payroll internally, there are many more that outsource their payroll as there are a number of benefits that come with deciding to outsource with a reputable payroll vendor. Here are some of the main reasons business owners choose to outsource payroll.
No matter the size of a business or how many employees they have, payroll processing takes up a lot of time and requires attention to detail. This is your employee’s pay, so you want to ensure there are no errors being made for compliance reasons as well as to not have any disgruntled employees. Business owners that outsource payroll can save time that otherwise would be taken away from critical tasks such as building revenue, serving customers and growth.
The cost of processing payroll can be greatly reduced by working with a payroll provider. Large businesses can afford to maintain robust payroll departments, however for small and mid-sized businesses, having an in-house payroll process is a money burner and can lead to errors in payroll taxes during filing time. The average company takes $608 of salary for a clerk to handle payroll. With a payroll company, you can cut that cost as well as any errors. A time/cost analysis can also indicate the benefits of outsourcing payroll. Think of all the time it takes to print, sign, and distribute pay stubs, generate reports, and stay on top of tax regulations. Time saved is money saved when you choose to outsource.
There are risks associated with payroll processing. Even with trusted employees, there’s potential risk of identity theft, embezzlement, or tampering with company records. If you do decide to outsource payroll, be sure to do your research and make sure your provider is reputable, as payroll software from companies that aren’t well established or have bad reviews could put your business at risk for security issues. Outsourcing payroll to an experienced and stable provider can ensure your payroll data stays confidential as they are equipped with the latest software and technology for storing and protecting client data.
Staying in compliance with state and federal regulations is pertinent for businesses to avoid any audits and penalties that are not cost friendly. Audits and penalties occur when cases of misrepresentation or failure to accurately report employment taxes to federal and state government agencies happen. Rules and regulations are always changing, and small businesses might not have the knowledge or efficiency to stay on top of all these changes on their own. Part of a professional payroll provider’s job is to stay current on these rules and regulations, and can provide their clients with the necessary information of regulatory updates, so they can inform their employees if any changes occur in their payroll.
Professional payroll companies are experts at what they do, and know the payroll processing inside and out. With the help of a professional payroll service provider, the hassles often associated with processing payroll is gone. You provide the basic information, and your payroll company takes care of the rest. They are trained to provide guaranteed service in payroll taxes as well as compliance of government regulations so your business can focus on the necessary functions to be successful.