Payroll is a sensitive and critical business activity, which requires accuracy and trust.
What is the most important factor you look for while outsourcing payroll?
Obviously, smooth running and accurate payroll processing is very important for you
What other factors you have to consider for your payroll service providers? Why outsource payroll? When to outsource payroll?
What... Why...When... Who...will be never-ending?
To answer all your queries, we have put together this guide to payroll outsourcing. Everything is outlined step by step, so you should be able to outsource payroll to the right payroll service providers and get the solution per your business requirement.
Let’s start and understand first what is payroll outsourcing?
What is payroll outsourcing?
Payroll outsourcing is the process of handing over the organization’s payroll tasks to the third party or service provider. Payroll outsourcing services in India is offered by many companies to save time, ease out work process, manage important tasks, etc.
Why people go for Payroll outsourcing?
With the present competition businesses are under increasing pressure to work flexibly to keep up with all the latest technologies while delivering a profit. To accomplish this, many businesses are now outsourcing everyday business tasks to help them to re-focus their resources on areas that support business growth and development.
What is the importance of Payroll outsourcing?
Here are the six facts to highlight the importance of Payroll outsourcing.
1. Access to Experts:
Outsourcing provides you the expertise and competent resource in certain skills that are not available in-house. Once you get the experts, you are confident in outsourcing the task.
2. Staffing Flexibility:
Outsourcing helps you to increase or decrease staff members with ease and comfort. Thus you can scale up and down your business as required.
3. Cost Saving:
Outsourcing saves a lot of expenses in terms of overhead cost, infrastructure, and management process.
4. Focus on core business:
Outsourcing helps your internal staff to focus on key business functions. Outsourced partners will handle the job so your staff can spend more time on tasks like marketing, content management, customer service, and other essential services. This, in turn, helps in speeding your business growth.
5. Managing Resources:
Outsourcing helps you to manage the in-house resources and any challenges from outside the business effectively.
If your project has a tight deadline, then the responsibility of delivering it on time lies on the shoulder of your outsourced partner. Thus outsourcing helps you to be stress-free and relaxed from the project deadline perspective.
Outsourcing can be done in various industries for different products and services. When we talk about payroll.
What is the motivation for outsourcing payroll? (Why... outsource payroll?)
Payroll requires a depth of knowledge. Small business owners don’t have that much time to acquire. There are many intricacies of tax rules and regulations which keep on changing regularly. Handling these changes is a challenge for the business owner.
Even if he decides to manage payroll in-house and if a small mistake occurs in payroll. This minor error will trigger hefty penalties and burn through any cost savings that you may realize by bringing the payroll in house.
This is the main reason for the business owner to think for outsourcing payroll. Other reasons for outsourcing payroll services:
- Cost savings
- Smooth payroll administration
- Avoid tax compliance penalties
When to outsource payroll?
The answer to this question depends upon several factors. Like
- If payroll administration and compliance becoming a nightmare for your team?
- If you want to get back to focus on your core activities?
- If you have grown but outgrown your existing methodology?
What factors do you need to consider while choosing a payroll provider?
Understand all the charges involved and how this stacks up with your business needs
Understand how the data is stored and where it is stored
Understand how the service offered by your provider is fitting around you
4. Service level agreement:
Verify whether all the terms and conditions, costing factor, delivery timeline and the offered service are properly articulated in the agreement or not.
Evaluate their technology and platforms used for payroll service
6. Level of service:
Exactly what your provider offers. For example, whether they only calculate the wages and payroll taxes Or provide only offer an online system.
What payroll functions can be outsourced?
This depends on the needs of the organization. Based on the needs a company may customize the payroll services that they outsource, keeping control of other aspects. Typically outsourced payroll functions are:
- Running payroll and paying salaries after withholding calculations
- Direct deposit of funds or issuing checks to employees
- Payroll tax calculations
- Filing payroll tax report
- Managing employee benefits
Let’s take a look at some of the benefits...
What are the benefits of outsourcing payroll services?
Payroll is a very time consuming and complex task. Payroll outsourcing is a B2B service in which businesses employ a third party to handle all payroll functions to save time and money. Outsourcing payroll reduces the need for in-house trained payroll staff, stays compliant with updated tax rules and regulations.
Outsourcing payroll services provide a number of benefits, few potential benefits are:
Managing payroll requires an expert resource to manage payroll processing inside and out. Hiring an expertise resource will be costly and not affordable for a small business owner.
Outsourcing payroll services shifts the responsibility to your outsourced partner to have that expertise with them to manage your payroll services. Thus outsourcing payroll is cost-efficient for you.
As a small business owner, you need to manage many things parallel. In that, if you want to manage payroll by own also, you will be fully tied up in payroll only. As this needs a lot of time and hectic calculation to process the payroll accurately on time. Also, it does not give you time to concentrate on other activities which are more important for you.
Here, Payroll service providers ensure to meet your unique business needs so that you do not end up paying for a service that you have not availed. Thus outsourcing provides complete flexibility to take care of other activities as and when required.
3. Quality and accuracy
The outsourced payroll partner is capable of handling payroll. They focus on the tax rules and regulations and other standards required to process payroll flawlessly. Thus outsourcing helps to maintain quality and accuracy while processing the payroll of the employees.
4. Minimize fraudulent activities
It’s a challenge to keep fraud away from payroll. Especially chances of fraud are more when payroll is managed in-house and people play multiple roles in a small company.
When a payroll service is outsourced, the person who manages payroll from the outsourced team is an employee of that partner. So he can’t do any fraud from outside.
5. Focus on core operations
Payroll service providers will help you to focus more on the core operations of the business. This frees up your time and makes you stress-free as all the hard work of payroll will be done by your outsourced payroll partner.
You can spend your time with the customers and taking new initiatives or steps to move the company to the next level.
6. More Security
Payroll has to handle lots of confidential and sensitive information. When it is outsourced, it provides an extra layer of safety for the details and prevents the data to be obtained by unauthorized men and women.
7. Maintain your workflow
Payroll is a complicated task that occupies space in the minds of decision-makers and disturbs the flow of work at the workplace. This takes their minds off the delivery of quality products and services to their customers.
Thus outsourcing services in India can handle the payroll management services and ease out the workflow.
8. Expertise and Guaranteed compliance
Payroll errors are very costly. A small mistake in payroll can cause inaccurate salaries to employees. Which creates a negative mindset in employees about the payroll system? Also when taxes are not calculated accurately and not submitted on time. It causes hefty fines from the government.
Outsourcing payroll ensures accurate payroll that’s process on time, every time. They are the first to know about the tax code and legislative changes that affect payroll and are adept at maintaining compliance payroll.
Hire paysquare which is one of the best payroll outsourcing companies in Mumbai. If you still have some questions to clarify before selecting your payroll provider. Ask the questions and clarify your doubts.
What questions to ask from your payroll service providers?
- How will you streamline our payroll processes?
- What is your payroll turnaround time?
- How flexible are their services?
- What technology do you use?
- What reports you will get?
- Will you have a dedicated contact?
- What Service Level agreements do they offer?
- What is the track record with organizations like yours?
- What expertise and skills do their employees have?
- How will they ensure data security and safety?
- What are their security and disaster recovery policies?
- What is their charging structure?
- Are there any hidden extras or charges in addition to their ‘per payslip’ price?
- What is the notice period if you want to leave?
- What is the minimum contract period?
- When you start with them what is the setup charge?
- What are the processes when something goes wrong?
- Do they offer online payroll services?
- Do they provide Online Payslips?
We have outlined step by step process which you need to follow when you go for outsourcing your payroll business.
How you can decide on outsourcing and selecting your payroll provider?
How payroll outsourcing could help your business?
What you need to think about if you decide to move forward with it? and
Some important considerations to help you to begin the process of selecting your provider?
If you are looking for the best payroll providers in India, pay square is one that offers complete payroll outsourcing services in India.