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10 Reasons to Outsource Payroll

October 8, 2012

There are not many managers or business owners who actually cite payroll management as a favorite task. In many instances, it can be beneficial to outsource a company’s payroll operations. The following are the top reasons why businesses turn to payroll services providers.

One: Cost

For big businesses, it is relatively easy to afford big payroll departments. Small businesses have difficulty in this area, as an in-house payroll service can be a money burner. If you have less than 20 employees in your company, then you most likely can save money by outsourcing payroll operations. Do the math to determine how much time your employees are spending on payroll-related tasks. Then, calculate what you are spending on this, and compare that figure to how much various plans cost that are offered through different payroll services providers. You should also factor in how much money the business spends on printing and distributing checks and creating tax documents and other similar things. You will surely be surprised by what you learn.

Two: Productivity

The practice of payroll management is a time-consuming one. When this burden has been removed, employees of your business will be able to focus on more productive things. There is even the possibility of trimming your staff’s size.

Three: Accuracy

When payroll mistakes occur, they can be quite painful, particularly to employees but also to the government. An experienced payroll services provider is far less likely to commit a major error than your own staff. If the provider makes a mistake, then you can seek out financial restitution. You will not be able to do the same with your employees.

Four: Reliability

Payroll activities that are completed in-house will be done as reliably as the individuals are who are doing the work. Quality and output speed will not vary depending on illnesses and vacations when you outsource through a payroll service. There is the added bonus of not having to train new hires on how to use the business’s payroll system.

Five: Speed

Payroll services providers have great technical resources at their disposal. This means that they are able to process complex payrolls very quickly. Unlike many employers, they may accommodate seasonal workers without having to acquire new systems that they will not use during the rest of the year.

Six: Insight

It is important for the individuals who are doing the payroll tasks to understand payroll-related tax laws and regulatory mandates that exist on the local, state, and federal levels. It is possible for your employees to achieve this level of understanding. However, they would have to put in a large investment in effort and time.

Seven: Accountability

The payroll services provider must take responsibility when paperwork has been mishandled or paychecks are delayed. It is your right to sue them if they will not remedy the situation to your satisfaction. Also, you can change to a new service provider quickly, even if it means you have to lose out on your existing contract. It is far less difficult and time-consuming than it would be to fire, hire and train new payroll staff.

Eight: Flexibility

Payroll work may be repetitive and boring. If you staff does not have to conduct these activities, they can work on other projects that are more creative. This way, the productivity levels will remain high and employees will not be bored.

Nine: Security

It takes a great deal of energy and time to supervise a business’s payroll for shady activities such as rate abuses. Many payroll services companies use technologies that can detect payroll fraud. Then, it alerts clients to these types of fraud, including “phantom workers” and payment manipulation.

Ten: Worry

There is a peace of mind that comes with outsourcing payroll services. The manager or business owner will have less hassles and headaches. They can focus completely on running a profitable business.

If you are trying to determine if outsourcing your payroll is right for you, give the team at Kathleen M. Egan CPA PLLC a call for a free payroll consultation.


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