According to a statistical analysis taken by Actionable Research, it was determined that approximately 75% of Certified Public Accountants that are employed by small business organizations state that their clients lack the insight and skill to professionally and efficiently manage the increasing requirements of payroll processing.
There are still plenty of businesses that choose to manage their payroll system manually via an in-house team of human resource professionals. However, there are a lot of business organizations that have begun to opt for payroll outsourcing. Outsourcing this critical business element can help businesses form crucial strategies that can possibly enable them to attain short and long-term milestones.
The 5 Best Factors of Outsourcing your Payroll System
You can save a lot of Time
Irrespective of the number of employees working for you, it is important to realize that you will have to invest a lot of time and pay a lot of attention to each and every detail. Every pay period is followed by another pay period – and each and every single time, business owners need to dedicate a large chunk of their time to thoroughly evaluate the reports they make, constantly checking for errors. The time you invest can be put to greater use within your business. For example, you can optimize your customer service.
This is why outsourcing this critical function is important. You will not have to worry about doing anything yourself. You will be paying a professional and diligent third-party to take care of everything on your behalf. Think about it.
You can Save Plenty on Operational Costs
Time is money. The more time you save, the more money you can make. Just look at the following points and think about the time you will have to spend drafting each and every factor that goes into payroll processing:
- Computing the payroll every month.
- Having all the documents printed – signing every document, signing every pay slip or pay stub, etc.
- In-house report generation and hiring an accountant.
- Making and double-checking payroll remittance
- Computing taxes and employee benefits – liaising with government agencies
If you evaluate all these factors, on a monthly basis, and take out the cost and time invested, you will realize how much you can save if you go for payroll outsourcing.
Encryption and Data Security
When it comes to small and medium businesses, it is important to understand that payroll processing requires a lot of due diligence and skills. It is a complex task and requires an eye for detail. The chances of errors are a lot, but what is even scarier is that the information can be stolen and used maliciously. Regardless of how trustworthy your staff is, the chances of identity theft, fund embezzlement, data tampering, use of data for personal gain, etc. will always be there, posing a great legal risk for you.
In comparison to this, outsourcing your payroll processing to a competent, reputable and professional organization can take the liability off of you. It can act as safe haven for your organization and you can rest assured that your employee data will remain encrypted and safe. Moreover, the third-party will also have redundant, fully-functional backup systems on hand to steer you clear from mismanagement and data loss.
Professional and Skilled Individuals
A reputable payroll outsourcing company has a team of exceptionally skilled individuals who are familiar with the complex dynamics that go into creating efficient and error free payroll. They are up-to-date with all the tax elements and are aware of different country laws and regulations.