The number one reason to outsource payroll is that it results in reduced costs. The best way to examine this is to compare the amount of time that is spent by employees on payroll-related activities compared to the amount of time spent when payroll is not done in-house. Not only can employees be more productive with their work, eliminating expenses such as the cost of printing checks, computer software, training and support also saves money. There are a number of professional payroll providers who will offer packages are a reasonably low rate for smaller companies. Prices can be as low as $50 per month, which is a fraction of the money that will be saved by outsourcing the payroll duties to someone else.
Another reason to outsource payroll is to reduce the workload of employees within the company. Payroll can be a time-consuming task for a number of small businesses. There are various additions that must be taken into each check being written including benefit accruals, garnishments, new hires and terminations, not member state and federal taxes. Outsourcing the task of completing payroll allows employers to concentrate their efforts towards the tasks that are pivotal towards accomplishing goals. It also frees up time for the human resources department or accounting department and allows them to work on more strategic tasks.
Errors in payroll can lead to further headaches. There are penalties for errors, omissions and late payroll tax fillings, which can lead to increased costs. By outsourcing payroll, professionals will calculate the taxes due for payroll, manage the tax fillings and payments, while also covering the costs that are accrued due to any mistakes made. Outsourced payroll will also ensure that all regulation changes will be taken into consideration, including state, federal, local, and industry-specific changes.
Reliability is another reason many small businesses are choosing to outsource their payroll. The one job of payroll companies is to ensure that payments are provided to employees on time and in the correct amount. This is an advantage for small businesses because more time can be spent on important tasks within the business and unforeseeable issues such as vacations and illnesses will not get in the way of employees receiving their checks on time.
There are a number of advantages of outsourcing payroll within a small business. Payroll is often a pain for many and gets in the way of important tasks needed to increase efficiency within the company. Outsourcing payroll eliminates the headache small business owners face every two weeks, while also increasing the efficiency of the company at the same time.