Out of all the non-core processes that organisations can outsource to external service providers, payroll remains one of the most popular areas. Recent studies reveal that it will increasingly be leveraged in the near future as well. Outsourcing payroll has proven to provide a host of potential cost savings as well as significant relief from the compliance burden which makes it quite the obvious choice for business owners. Although they need to carefully choose the right payroll partner to avoid missteps that cause frustration for staff and embarrassment for employers.
If payroll is not processed in the right manner, it can result in penalties from the administering government agencies. Payroll processing activities include the application of all the central and state government compliances. Thus it necessary to have update information about everything related to payroll to reduce the likelihood of errors and penalties.
Why you should outsource payroll to the experts:
1. Cost savings
One of the most important benefit of outsourcing the monthly payroll processing is the cost that you can save. Companies who are known to primarily outsource their payroll because of all the hassles involved are pleasantly surprised to learn that they will also get to save costs in the long term.
2. Accuracy & Accountability
While every process demands complete accuracy, salary remains on top of the list. Organizations with multiple processes and/or global workforces need to be particularly careful as the ramifications can be huge. The cost of payroll errors for an in-house payroll team can lead to wastage of time and money. In addition it can be a huge blow to employee satisfaction as well. Thus accuracy and accountability play an important roles when companies decide to onboard a new payroll software and/or vendor. In-house payroll teams are known to drop the ball a few times which resulted in a reduction of employee morale of the organisation.
3. Enhanced security
Payroll processing is a delicate and risky procedure despite having trusted employees. Even with the best of intentions, some employees may inadvertently leak sensitive information. At the same time in-house payroll software may also have insufficient security that cause business owners to worry day in and night. Outsourcing payroll can actually protect your payroll information as these service providers are particularly known for their robust security as well as redundant backup and multiple server locations. These companies invest in state-of-the-art systems for storing and protecting data as security is one of the major concerns of their clients
4. Better reporting
Payroll outsourcing companies provide comprehensive reports that address all the reporting requirements of their clients. In-house payroll software are usually not able to provide such detailed reports or may take up a lot of time which can lead to a number of delays. Outsourcing service providers are well equipped to deliver specific & ad-hoc reports as and when their clients demand it and enable them to take correct decisions at the right time.
5. Ensure Compliance
Every region has different set of compliance norms that have an impact on payroll management which should not be taken lightly. Companies to make sure that have sufficient expertise in payroll legislation and system knowledge as they could become a risk to the administration of payroll. Developing such expert knowledge can be a time-consuming process for in-house payroll teams. Thus an increasing amount of service providers have taken up the onus of increasing their compliance functionalities. They definitely need to be up to date with all relevant payroll-related statutes and regulations if they want to provide competitive services.
6. Leverage expertise
Outsourcing service providers hire individuals who have complete and update knowledge of all the payroll and compliance norms. They particularly specialize in the complexities of payroll taxes, as well as compliance with government regulations. Companies can leverage their expertise and make sure all the rules and regulations are strictly adhered to at all times. This way they can save a great deal of time and money as well as ensure greater data security. It is also a relief knowing that such experts are handling your payroll functions which reinforces their belief in the compelling reasons to explore the benefits of outsourcing today.
Companies that rely on In-house payroll activities have to depend on the expertise and knowledge of the people doing the work. Not to speak of their willingness to provide accurate services. Thus by outsourcing to a reliable payroll service provider they can be assured that the output, speed and quality won’t vary in accordance with holidays and sickness. There is always a risk that you may lose one of the key members of staff that deal with your payroll and all their knowledge walks away with them. If this happens you could find it extremely difficult to replace them, causing a logistical nightmare come payday. You also won’t have to spend time training new staff or helping them to understand your business’s payroll system.