Even though payroll is time-consuming, it plays an essential role in every operation. Businesses of all sizes opt to outsource their payroll functions to professionals rather than managing payroll functions in-house with manual bookkeeping.
What Exactly is Payroll Outsourcing?
Outsourcing payroll functions allows businesses to save money, time, and effort by outsourcing all payroll functions to an external manager. Comparatively to in-house payroll management, outsourced payroll solutions provide a higher level of accuracy since they are prepared, analysed, and evaluated by qualified professionals.
Ideally, payroll outsourcing achieves three key goals –
- It allows businesses to focus more on core tasks by freeing up both time and resources.
- The costs and risks associated with it are reduced.
- Ensures businesses have access to the latest payroll technology and expertise.
Let us discuss these benefits in more detail and understand what they mean for businesses.
Benefits of Outsourcing Payroll
The following advantages can be gained from outsourcing your payroll process to a qualified service provider.
- Enhanced Productivity/Time Saving
The process of managing payroll processing in-house is extremely time-consuming and requires a great deal of resources, manpower, and attention to detail, resulting in lost productivity. Furthermore, the time spent on accurate payroll management, involving a great deal of data, diverts time from core business activities.
Businesses and HR departments can devote more time to other important tasks for business growth and expansion by outsource payroll.
- Reduced Costs
Time is the most important commodity for any business owner. It is linked to the revenue that the business generates from tasks that it handles. Time is money, so the more time they save each day, the more money they earn.
There is a huge value when it comes to calculating employee hours, paid time off, deductions, leaves, printing and distributing paychecks, and completing tax returns.
The outsourcing of payroll processing allows you to ensure all aspects of the payroll process, including handling payroll inquiries, calculating payroll taxes, and filing statutory documents, are handled efficiently and effectively. By outsourcing payroll functions, you can save a lot of money when you compare how much time is spent in-house managing payroll, versus how much you would have paid for those services if you did it internally.
- Advantage of the Latest Technology
The rapid advancement of technology has led to an increase in global payroll companies using cloud-based systems to manage their business data, give better visibility and transparency to payroll processing, and maintain robust data integrity.
With outsourcing payroll, you can also take advantage of emerging technologies, such as RPA, used by specialist payroll service providers to optimize payroll processing, improving the accuracy and timeliness of the process. Many of the latest payroll technologies are used by professional payroll providers such as UptoDate Bookkeeping to manage payroll outsourcing seamlessly.
- Compliance
When it comes to handling complicated government tax regulations related to payroll, many small business owners struggle. It becomes difficult to process salaries and reimbursements of every employee in an organization due to a variety of complex rules, employee benefit mistakes, multiple bylaws, PF percentages, and taxes. It is important that businesses avoid mistakes that can lead to audit irregularities and penalties.
Professional payroll service providers, on the other hand, have the required expertise and are always abreast about the latest compliance regulations, and tax rate changes. They also have dedicated staff to help companies meet all the regulatory updates.
- Enhanced Data Security
Managing payroll in-house entails a number of risks, including the safety of the server/network and embezzlement. There is also always a risk of data mishandling when increasing numbers of employees are working from home these days.
Providers of outsourced payroll services use highly secure cloud-based servers and encryption technology to keep your sensitive information safe.
Conclusion
Despite not directly affecting the business, payroll is one of those critical business functions. However, if it is not done in an efficient manner, it can negatively impact the overall business.
Providers of payroll services specializing in payroll management typically provide many services including compliance, complexities of regulations, tax calculations, and human resource management. UptoDate Bookkeeping, powered by a strong technology backbone, has achieved >99.8% accuracy in managing payroll for our clients. With such trained professionals handling payroll functions, business productivity can be enhanced, and you can focus on the growth of your company.