Payroll in simple terms can be defined as the total amount of wages paid by a company to its employees and other workers and the amount may be paid during a week, month or on any other period.
A company’s payroll is usually the largest business expense and the processing of payroll is quite complicated that adds to the complexity and cost of the operation.
Components of payroll include – Gross Wages, Benefits, Social Security and Medicare, Tax Withholdings among others.
Why should I Outsource my Payroll?
Running payroll functions in-house is time-consuming as well as expensive especially for small and medium-sized business enterprises and as such the concept of payroll outsourcing is in vogue.
By outsourcing the payroll one can derive the benefits of the expertise of professional payroll outsourcing companies in the form of cost savings, avoid mistakes in the filing of the payroll tax and penalties from late filing of the payroll tax returns.
Why do Big Companies use Outsourcing Services?
Some of the larges companies are using payroll outsourcing services due to the following benefits or reasons such as-
- Cost Savings by avoiding the need to use in-house resources to comply with complex payroll requirements.
- To avoid mistakes in the form of incorrect filings and or late tax payments. Penalties for errors, omissions, or late payroll tax filing can prove to be very costly. In some cases, payroll mistakes may be painful that would result in dissatisfaction among employees and not reporting timely or accurate tax filing to the government post red flags to the IRS.
- By outsourcing, payroll companies can reap the benefits of expertise of professionals in payroll outsourcing companies who can handle many areas or specializations in Human Resources and Payroll.
- Big companies by using the services of payroll outsourcing companies can avoid security concerns related to identity theft, embezzlement of funds or tampering with company files for personal gains when using in-house payroll software.
Payroll outsourcing companies have secured and stringent technology in place that can spot and alert their clients to various type of payroll fraud when using their payroll services.
Small businesses should start outsourcing to India due to the following advantages such as-
- India has a huge pool of highly educated and experienced professionals in the field of finance, especially in payroll services. Therefore, small businesses can gain from their knowledge and experience by outsourcing their payroll and focus on their core businesses.
- Another advantage for small business to start outsourcing to India is cost-effectiveness due to the difference between the value of Indian currency and many other currencies especially U.S. dollar.
Payroll outsourcing companies in Chennai are handling business processes at low costs providing high-quality services through their experienced professional employees with outstanding knowledge and skills.
- For small businesses, time is very precious therefore outsourcing to India can save them more time due to time zone differences letting the payroll outsourcing companies in Bangalore providing 24/7 customer service.
Why is India the best market for business process outsourcing?
India is the most attractive place in the world for Business Process Outsourcing and has been placed at the top of the list of the most attractive destinations for outsourced services by A.T. Kearney in its 8th edition of the ‘Global Services Location Index’ during 2017.
The factors that make India one of the best markets to outsource-
- Availability of skill set of highly qualified and experienced professionals and workers
- Access to latest updated technologies and IT infrastructure at very low costs
- Demographics advantage due to a majority of the population is younger and underneath 30 ready to offer their skills at much lower wage rates without compromising on the quality of BPO services.