After working with a series of small and medium organizations over the years, we have discovered that most of the companies face challenges in payroll processing in the starting.
Let’s see how:
If you a designing firm, your core business operation revolves around designing. So, that’s what you focus on: you hire designers and creative people to accompany these designers, such as content writers. Other tasks of the office are handled by you. For instance, payroll calculations, accounting, etc.
Initially, you are able to do it because you have 5-20 projects, and you occasionally need to go on client meetings.
However, over the years, your business grows, and your clients increase from 20 to 40, and your workload enhances. Your existing clients need more work, and you need to handle more activities. As a result, payroll is pushed back. On 30 of every month, you are already running to complete deadlines, so how will you prepare payroll and dispatch it?
Sometimes, salaries get delayed, and eventually, employees start getting frustrated.
If you are relating to this situation, then outsourced payroll management is for you. In this article, we have talked about the challenges of payroll processing along with the solution.
Challenges Faced By Organizations in Payroll Processing
As a business owner, you must be already facing administrative and payroll processing challenges. There are so many complex calculations, time-consuming management, and tax preparations. It is expected to face challenges in payroll processes. But, you can mitigate these issues with outsourced payroll management.
Let’s explore some challenges in payroll processing.
The biggest challenge in payroll processing is the cost of hiring employees, purchasing a payroll system, and managing it. There’s a price for employee management, software upgrade, and other activities, which is an added burden. You can mitigate it with an online payroll management system or outsourcing.
Other than the high costs of management, accuracy is another concern. You need to accurately calculate and dispatch payroll every month without fail. If you have freelance or contract work, which is common in small and medium organizations now, then you need to calculate payroll weekly.
While the cost of payroll can still be managed by the company, compliance issues are dreadful. There are so many laws and regulations that you need to follow. From minimum wages act to PPF requirements, everything is a hassle. As a small or medium business, it can get hard to correctly process payroll. One mistake means penalties and fines!
Apart from all the things that we have discussed above, security is the most nagging concern. When you are handling the payroll of employees, you are storing important data related to your employees. Their personal information and account details are stored in your database. Securing this data is imperative but in a small and medium organization, there’s no provision for this.
Generally, small and medium businesses assign payroll responsibility to one person. Many times, this person is originally hired for some other work. When that happens, the employee is overburdened, which leads to inefficiency and low productivity. Outsourced payroll management can be easily utilized to manage time and productivity.
Avoiding Common Payroll Errors With Outsourced Payroll Management
Facing errors in payroll calculations is the biggest challenge for small and medium organizations. From missed deadlines to inaccuracy, everything leads to reputational loss. Let’s analyse errors in payroll processing and see how you can mitigate them.
1. Missed Deadlines
One of the biggest and most crucial mistakes of payroll processing is delaying payroll. You have promised to dispatch salaries on the 7th of every month, yet your payroll is not processed till the night of the 7th. This leads to employee dissatisfaction and turnover.
Further, missing deadlines of PPF and taxes also come with penalties. If you deduct employee TDS and taxes, you need to pay it on time.
2. No Backup
Another issue with small and medium organizations is that they don’t have the provision to keep backups. Sometimes, PCs crash, and at other times, there’s no space for payroll backup. This makes you lose data, and then errors and inconsistencies occur.
3. New Tax Reforms
When new tax reforms are launched, it is difficult for organizations to keep track. Even if they do keep track of changes, they may fail to understand the implementation. In outsourced payroll management, your provider is able to implement every reform without hassle. They have the expertise for this task.
How Outsourced Payroll Services is the Best Solution?
Till now, this article has discussed errors and challenges in payroll processing. Now, we will look at how outsourced payroll services can mitigate every issue that you have been facing in payroll. Whether you are tired of inaccurate calculations or delayed dispatch of salaries, the payroll outsourcing provider has the provision and system to resolve your issues. Below we have discussed how:
1. Save Time and Money
When you have to run a small or medium business and look after the core business operation, time is important. In fact, it is already hard to make enough time for core activities, then how can you make time for payroll processes?
Outsourced payroll services help you save time to spend on payroll. The outsourced payroll provider will take care of your payroll activities. You just need to focus on core business operations, such as software development, designing, etc.
This also saves you time because you don’t need to pay multiple full-time employees and manage them. The payment of outsourced payroll management is according to your use. You pay for services utilized. That’s all!
2. Improve Security
One of the challenges in payroll processing is security. With outsourced payroll management, your provider uses secure software, which is protected with additional controls. Every data shared through the system to you or employees is secured and encrypted properly. This ensures the security of your data and the authenticity of transactions.
Further, your outsourced payroll service would employ an online payment pipeline, which can be tracked and traced much easily than offline payments. This additionally improves your data security.
3. Get Peace of Mind
It is an underestimated benefit of outsourced payroll management – peace of mind! With the right online payroll management system, you get peace of mind. You don’t have to worry about calculations, errors, and other tasks consistently. You just know everything is being taken care of. So, your days are more peaceful and free from anxiety.
4. The Latest Technology
We are living in the era of technology, and you can’t get payroll accuracy without technology. You need technology to automate tasks, such as attendance calculations. Further, technology offers you an online payroll management system that helps your employees extract the details that they need.
This employee self-service portal helps check attendance, apply for leaves, and generate payslips. So many activities are automated, isn’t it so great?
Here’s what you get with the right technology offered by the outsourced payroll management provider:
- Real-time data
- Employee support
5. Expert Advice
Apart from all the above benefits that we discussed, there’s the feasibility of expert advice. There are some situations in payroll (and even in other departments) where you necessarily need expert advice. How can you get it when you are handling payroll yourself?
With outsourced payroll management, you have the power to call your provider and talk to an expert. Take advice for management, change the structure, and understand the impact on employees.
6. Support System
If you look at it, then an outsourced payroll service provider is your support system. You can rely on them when you have absolutely no time to look after attendance, taxes, or payroll. You just need to call your provider in good faith and ask them to handle things since you are busy with a project.
It is not just a service, it’s an entire support system!
Outsourced payroll management is nothing but the ability to allow a third party to calculate and manage your payroll. This activity doesn’t take away your control. In fact, it gives you additional control over your payroll dispatch. You can decide the structure, make changes in the payroll dispatch date, and allow employees to use the employee service portal. It is so much less hassle! It is accurate and simply the best decision for a small or medium organization.
All you need is the right outsourced payroll service provider for your business. But, for that, you don’t need to worry as Paysquare can help you. Throughout these years, Paysquare has catered to the payroll challenges and requests of various clients. As a result, we have developed the expertise to handle challenges in payroll processing, whether it is tax calculations or the latest reform. To know more about our outsourced payroll services, check out our website and connect with us.