The whole world is getting the heat of the Corona pandemic, then how can MSME remain unaffected by it? Experts fear that SMEs will be the most impacted because of their limited capabilities.
Lack of technical expertise and perceived costs of creating a web-enabled environment are the biggest challenges. Studies say that only half of the total SMEs are equipped with reasonably good IT infrastructure. Also, the nature of work does not support the “work from home” arrangement.
Moreover, the IT skills of medium and lower-level staff in an SME company are also not quite convincing. The initial impact of lockdown was disastrous on the SME sector. According to a survey, more than fifty percent of the companies closed their operations temporarily. Some of them resumed operations after “Unlock1” and “Unlock2”. Some of them are still waiting for normalcy.
Impact of Covid-19 on SME sector
The pause was more prominent in the big cities and metros. The more impacted business verticals were manufacturing and retail. The majority of the entrepreneurs feel that it will take at least six months to return to normal.
Because of the significant impact on business operations, the SME sector is looking for support from the government to offer tax exemptions and discounts. Around 40 percent of SMEs are asking for loans at low or zero interest.
Some of them are getting ready for the ‘New Normal’ by launching their business websites or e-commerce facilities during the lockdown period. All the sectors expect an increase of up to 50 percent in the contribution by e-commerce as compared to Pre-Covid time.
Some sectors, such as education, will get a boost, and startups, as well as established companies, will see an expansion in the business.
Covid-19 has forced everyone to rethink about a healthy life. SME. Will embrace digital presence so that they can have some feeling of normalcy and continue to serve their customers.
Those companies who will not be able to cope up with technical expertise are going to face a severe challenge.
In this difficult scenario, it is essential that an SME reduces the operational load and outsource non-core activities to specialists.
Take the example of payroll processing. It is something that can be easily outsourced. The blog tells about some distinct advantages for an SME to hire payroll outsourcing services for small businesses.
Why SMEs need payroll outsourcing in view of Covid-19?
As discussed earlier, SMEs are impacted greatly by the pandemic. Since the top and bottom lines have both been impacted, it is essential to cut the expenses to improve profitability.
How much importance of Payroll Outsourcing is there?
It is a non-core activity that is a good candidate for outsourcing. Why and how is it important?
Let us understand in detail why should you hire the best payroll service for SMEs?
It saves time and makes productivity better
It is a fact that payroll processing is a lengthy, tedious, and time-taking process. Taking into consideration benefits, garnishments, paid time off, new joining and resignations, leave and perk calculation, the list of tasks is endless.
Every month a lot of labor hours are spent preparing wages, salaries, and complying with the government norms.
Your HR and finance team has to spend time in calculating payroll instead of concentrating their core business. It suffers the bottom line at the end of the day. It required efforts to respond to the queries. Hence, Outsourcing payroll solution SMEs is a better idea.
Instead of doing this repetitive task, you should outsource it to one of the top payroll outsourcing services for small businesses and free up precious time and resources.
The direct costs of processing payroll can be reduced by giving it to a payroll service provider. SME has limited resources. Hence, even a small cost reduction can also have a big impact on profitability. Especially, an SME, which has fewer than 30 employees, it saves big money.
You will be surprised by calculating the costs of payroll processing. When you consider the cost of wages of an employee and add benefits to it, that can be added up quickly. When you own an SME, and you do the calculation yourself, the cost of time spent is quite high. Hire Outsourcing payroll vendors instead of managing it internally.
Outsourcing the process to the best payroll services for startups will make you free from all the worries.
Most governments impose penalties if there is a delay in submitting payroll details. There are penalties for errors also.
When you manage payroll in-house and make some mistakes or delay the submission, the cost implication could be devastating.
Small businesses cannot afford to get penalties. The profit margins are already stretched there. Hence, hiring a professional payroll processing company is great. You stay current with the rules and regulation, and change in the taxation, and submit everything timely.
Payroll Services for Large enterprise sign the contract with a service guarantee. It includes penalties if the service provider makes errors or delays in payroll processing.
You get the benefit of expertise
You own an SME where each team member is a subject matter expert. Payroll processing is a non-core activity for which you do not have any specialists. There is nobody who can keep track of constantly changing regulations, government forms, and withholding rates.
When you buy an Outsourcing payroll solution SMEs, you take advantage of expertise. There you get people who have spent years in calculating payroll.
They do the work diligently and efficiently. And can administer all aspects of your payroll, admin, and HR needs.
There are many security issues with payroll processing. The risk of identity theft, alteration of company files for personal interests, and misappropriation of funds are always there. Hence, it is better to give this potentially risky operation to some expert company.
When you run the SME business, you cannot afford it. You do not have to supervise payroll for unethical activities such as rate or time abuses. Payroll processing software has an in-built alert and checking mechanism to detect potential frauds.
Not just that, the confidentiality of your sensitive payroll data is also not at any risk. It is like a ‘safe heaven’ for data because of redundant backup, multiple servers, and state-of-the-art processing environment.
No need to spend on a technical upgrade
Do you have a payroll management system? If yes, then you will have to spend money on constantly upgrading it.
Being the owner of an SME company, you have to keep a close eye on expenses.
Instead of buying a payroll management system and spending on maintenance fees and upgrade software every year, you should outsource it to an expert. It removes the headache of maintaining the system.
Benefits of outsourcing payroll
You can do direct deposit:
Without the help of an outside payroll processing company, it is difficult to deposit money directly to your team members' accounts. Nowadays, every company, big or small, has recognized the benefit of it. When you are an SME owner, you also wish to march with the competition. Outsource the work to a professional company and eliminate the tedious and error-prone method of reconciling individual payroll account. Direct deposit removes the possibility of fraud and mismanagement.
You have total peace of mind:
When you own an SME company, there are hundreds of issues you are supposed to handle. When the payroll processing is managed by someone else, you get peace of mind. Your HR and accounts need not waste their valuable time in calculating and processing salary and wages. It is a mundane, repetitive work. Payroll management companies have the necessary infrastructure to handle the processing load. You sign a service contract and get a smooth, industry-standard service. Process accuracy and system security are assured by the service provider.
Incorrect paycheck causes distress and frustration among your employees. When there are repeated calculation mistakes, they lose confidence in the organization. It causes disengagement, and ultimately it leads to employee churn. Even if employees do not leave the organization, but they will not work with 100% efficiency. Hence, it is important to win their confidence by hiring Outsourcing payroll solution SMEs.When you own SME business, you can identify several factors that prevent profitability and hinder productivity growth if you manage payroll in-house. Thus, it is a sufficient business case t make the switch for outsourcing payroll calculations.
When the payroll processing partner does a quality job, outsourcing partnership stays long.
In Conclusion, when you encounter a business owner or manager who can identify with 1 or more of these factors that prevent productivity and hinder profitability centered around the time and cost associated with administering your payroll, one can usually find a business case to make the switch for outsourcing payroll. You must know the Importance of Payroll Outsourcing and key benefits of it. Assuming the payroll provider does a quality job and serves the client, these outsourcing relationships become long-standing business partnerships.