November 3, 2018
Contrary to what some non-business minds may tell you, when put in place effectively, outsourcing payroll can be a fantastic way of cutting costs and giving a business an even better return on their investment. Read on to know more:
How can outsourcing payroll save money for your business?
Getting paid as a professional payroll service, means receiving money for the number of checks that they produce. As a result, processing payroll becomes the type of cost that can vary greatly depending on the number of employees; less staff, less checks to produce, less costs to pay to the payroll company. When you employ a staff member to work solely on processing payroll, they will be on a fixed rate that does not alter irrespective of how small your team of employees may be.
Not only can outsourcing payroll benefit your company financially, but with an in-house team or single staff member assigned to payroll duties, they may find themselves falling behind with the workload due to their lack of up to date knowledge of rules and regulations, time restrictions placed upon them, and so forth. An outsourced payroll professional makes it their business to get everything processed in time and accurately, while remaining compliant with state and federal law. They also never take unpaid leave, don’t receive sick pay and will usually be available around holiday times to ensure that payroll continues to be processed unhindered.
In what other ways can outsourcing payroll be cost effective for your business?
The benefits of outsourcing payroll from a financial perspective are many and varied, and here
are just a few more of them:
- Risk of penalties is greatly reduced
Many businesses every year are subjected to costly penalties for failing to comply in all areas of payroll, but when you outsource payroll to a pro, the risk is not only dramatically reduced, but should you incur any penalties, they will take full responsibility.
- Risk of costly errors is eliminated
Your payroll professional will have access to superior systems that totally eliminate the errors that can be made when calculating paid hours and taxes, and since these can be costly and time consuming if they have to be redone, it makes clear financial sense to outsource these duties.
- They will give you in-depth management reports
These reports will give you, the business owner or manager, the ability to better define and control your labor costs and enable you to integrate the data with your accounting system.
- Automated timekeeping will be at your disposal
Your outsourced payroll professional will supply you with a high quality and incredibly accurate timekeeping system, that wipes out almost all the costs associated with tracking employees time while they’re at work.
- Determining your pre-tax credits
Many employers are unaware of pre-tax deductions, or simply don’t bother to use them to their advantage. A payroll professional will help you work out these benefits and often create other tax savings that can end up totalling more than the cost of hiring them. Managing your employees, their benefits and many other HR issues can all be tackled by an outsourced payroll pro, and as these areas are extremely important and can be risky and costly if ignored, it gives you yet another incentive to handle payroll outside of your company.
As you’ll see from reading through the information above, outsourcing payroll can have very real monetary benefits for a business, and if as a business owner, you believe that keeping payroll within your workforce is a smart, cost effective move, you might well want to think again.