Do you still have an in-house team managing your payroll?
You might want to reconsider that.
Outsourcing bookkeeping and accounting payroll services are becoming a common solution for both small and big businesses. Once enjoyed only by big companies and mid-market enterprises, the benefits of payroll outsourcing are now applicable to small enterprises.
Outsourcing your payroll duties to an outside party can save you a significant amount of time and money. It can also ensure that your accounting operations remain compliant with regulatory authorities.
But is that all you can get out of outsourced accounting services? Read on to find out.
10 Benefits of Payroll Outsourcing
Here are some benefits to consider:
1. Time Savings
Payroll accounting is a time-intensive process. It’s a detail-oriented procedure that involves tracking new hires, contract terminations, benefit deductions, and pay increases.
Since it’s a repetitive process that can’t be rushed, it takes up a large chunk of your employees’ time. As a result, they may prefer to push it to the bottom of their schedules. This can have a negative impact on productivity and deadlines.
By outsourcing this important, yet time-consuming process, you free up a significant amount of time in your employees’ schedules. That way, your team’s skills and efforts can be directed to other core business activities.
2. Reduction of Overhead Costs
As a business manager, there’s a dollar value attached to your time expenditure. As such, every minute you spend doing activities that don’t help your business generate revenues is costly. Taking that into consideration, the time spent handling payroll tasks translates into money lost.
Think of the time that goes into calculating paid time-offs, employee working hours, sick leaves, processing direct deposits, and issuing paychecks. This is not to mention the time you spend preparing payroll reports and submitting federal and state employment taxes.
If you assign a dollar value to all that time and compare it to the total cost of outsourcing, you’ll realize that delegating these duties saves you a lot of money in terms of overhead costs.
3. Compliance With Government Regulations
With so many laws governing payroll accounting, it’s challenging for corporations to process salaries and incentives for their employees.
With a payroll outsourcing partner such as this company, you won’t have to worry about getting on the wrong side of the law. The best outsourced accounting services always follow all the state and federal laws.
And, if you have a debt with the IRS, they’ll guide you through the ins and outs of getting a tax debt relief.
4. Access to Top-Notch Systems
Payroll outsourcing gives you instant access to the best accounting tools in the industry. Top-notch accounting systems are expensive to buy and maintain, and most small businesses can’t afford them.
By outsourcing, you’re basically buying top-quality systems and the technical know-how. The best part is, you don’t have to do any work. Your outsourcing partner handles everything for you.
Additionally, their systems will create neat backups. This will keep your books organized for years in case IRS auditors come knocking.
5. Proactive Management
As the manager, you aren’t always available to oversee the books. The scope of your job is greater, and you may not be able to focus all your energy and resources to keeping track of payroll accounting.
With a payroll outsourcing service, you get to focus on your main job – growing your company and meeting organizational goals. Your outsourced team can be proactive with payroll management. This means they’ll identify red flags and inform you to take necessary precautions early enough.
This way, you’ll always be informed ahead of time so you can make intelligent decisions.
6. Fraud Check
Outsourcing your payroll function to a reliable provider can help you get rid of fraud.
The service provider will be accountable for all your transactions. As such, they’ll make deliberate efforts to accurately track everything, thus eliminating all fraud loopholes.
7. Employee Satisfaction
With payroll outsourcing, you get one-time payroll processing capability. With this, you’ll be able to quickly and efficiently pay your employees through direct deposits. Such quick and prompt payments will keep your workforce motivated and productive, a feat that’s critical to achieving business augmentation.
8. Improved Data Security
A company’s payroll information is sensitive, and any kind of unauthorized access can cause dire repercussions. If you store your payroll information on an in-house network or server that isn’t very secure, you’re exposing your company to cybercrime.
You can hire experts to encrypt your servers to prevent unauthorized access, but it’ll be costly. Plus, it doesn’t make sense to pay for your own cyber protection when you can get it as part of the outsourcing benefits package.
With outsourcing, comes the guarantee that all your payroll data is stored and backed up in secure servers and networks. Part of the selling point of many professional outsourcing service providers is their ability to safeguard your information against cybercrime. As such, they invest in the latest security software and trained personnel to keep your data safe.
9. Accurate Payroll Accounting
With your employees also handling other accounting functions, it’s easy to make errors when tracking and recording payroll transactions.
You can eliminate any chances of error by outsourcing this important accounting function to an outside party. This will also improve your management of other back-office functions.
10. Scalability Options
Whether you want to cut down on expenditure or grow your company, having an experienced payroll team in your corner will provide you with the options and plans you need to fast track your progress.
You can’t get this kind of flexibility with an in-house payroll accounting team.
Hiring the Best Payroll Outsourcing Partners
To realize these ten benefits of payroll outsourcing, you need to hire reliable professionals. Check for things like experience and review from past clients to get an idea of what a prospective service provider has to offer. Don’t forget to cross check their license to ensure that they’re licensed to operate in your state.
For more insights on how to grow and streamline your small business operations, check out our business advice category for the latest articles.