Payroll
Benefits of outsourcing payroll
Outsourcing payroll to a third-party company does offer a number of benefits to companies who use this practice. A few of the top advantages include:
Saving time
Manual payroll takes a lot of time. Payroll officers have to track or find information regarding:
- Benefit deductions
- Wage garnishments
- Paid time off
- Unpaid time off
- State taxes
- Federal taxes
This can be a challenge for a single employee to handle for an entire company, particularly if they have other job responsibilities beyond payroll. Outsourcing payroll removes all of those responsibilities from your team and saves you time.
Reducing costs & maintaining tax accuracy
Often, particularly for small or medium businesses, outsourcing payroll saves money. The time and resource cost of performing payroll in-house is almost always more expensive than the monthly cost of having a dedicated payroll company handle the process.
Tax regulations are often quite complicated. These laws also change regularly, and without proper education and training, employees can make unintentional, but costly, payroll tax errors. Outsourcing payroll to a dedicated company ensures those handling your payroll are well-trained and qualified to handle the tax aspects of payroll.
Ensuring compliance & Providing security
Aside from taxes, using a payroll company with experienced and trained payroll professionals ensures that your payroll processes will meet all state and federal rules and regulations.
Computer security is costly. Many small businesses don’t have the resources to properly encrypt and store sensitive data, like employee bank account information, properly. Most payroll companies have sophisticated security measures in place to protect their clients’ data.
Eliminating software concerns & Spreading out support
Those who manage their own in-house payroll often use software programs to help them track hours and calculate earnings. However, these programs can be expensive and may require regular updates or patches to function properly. Using a payroll company eliminates this expense.
For small businesses in particular, there’s usually a single employee who manages the payroll process. If that person falls ill or takes a vacation, managing payroll can pose a big challenge for the company. When you use a payroll company instead, you don’t have to worry about one person managing the process, since the company has a team in place to ensure your payroll gets processed.
Offering direct deposit
Despite the ubiquity of online banking, offering direct deposit is not easy for most small businesses who perform their own in-house payroll processing. Third-party payroll companies have the resources to set up direct deposit for your employees.
