For company owners, processing payroll may be a laborious and time-consuming chore. It necessitates accurate information entry, adherence to rules and regulations, and attention to detail.
It’s also easy to make mistakes, and the consequences can be costly.
Saves You Time
Managing payroll in-house can be an expensive and time-consuming task. Outsourcing this function to a third party saves money, gives access to experts, prioritizes your core business, and enhances compliance with local and state regulations.
Depending on your business’s size, payroll processing can take hours each pay period. This includes calculating and filing taxes, distributing checks, handling employee inquiries, and more. Outsourcing this task to a professional third-party provider frees up your time to focus on your company’s growth and success.
Outsourcing to trusted payrolling services protects your data from theft, embezzlement, and other risks. A quality provider uses redundancies and multiple servers to safeguard your information. They also utilize cutting-edge encryption technology. This ensures that your data is safe at all times.
Saves You Money
Processing payroll can be time-consuming. It requires attention to changing state and federal regulations, the input of various forms of data, and double-checking for errors. According to Deloitte, this can take hours – a big chunk of your finance, HR, and accounting teams could spend on other duties and tasks related to your core business.
Payroll tax laws change regularly, and failure to comply can cost your business money in fines. Outsourcing payroll services to a dedicated company can ensure taxes are withheld and filed correctly, helping your business avoid costly penalties.
Another area where outsourcing can save your business is in computer security. Keeping sensitive data, like employee bank account information, on your own can leave your company vulnerable to hacking and embezzlement. A reputable payroll provider will have redundant backup systems and multiple server locations to protect this data.
Saves You From Mistakes
Payroll errors are a common problem for small businesses. These mistakes can be costly, and many can even lead to tax penalties. Using a payroll provider allows you to avoid these errors, as they are dedicated to ensuring the accuracy of their reporting.
Having a company focusing solely on payroll also keeps them updated with labor laws and regulations changes. They can also better keep your information secure, as they have protocols that protect against cyberattacks and other malicious activity.
HR and accounting employees need help knowing every law and regulation, especially when they are constantly busy running their businesses. By outsourcing your payroll, you can save yourself from expensive fines for missed compliance deadlines and other issues.
Saves You From Mistakes With Taxes
Payroll tax filings are a complicated business, and mistakes can cost you. Many companies get paid compliance fines and penalties yearly for missed payroll filing deadlines or other errors that can be costly.
By keeping up with changes in rules, data security, labor standards, general employment laws, and other areas, an impartial third-party specialist managing your payroll may help you avoid these problems. A trustworthy third-party payroll business will also be responsible for filing and remitting taxes on your workers’ behalf.
Most providers report to their clients on a regular predetermined basis, confirming services rendered and detailing performance. This allows them to keep the client in the loop about what is happening with their payroll and any potential issues.
Saves You From Mistakes With Social Security
While handling payroll in-house may seem simple, it is one of the most complicated and error-prone business functions. This is because it involves more than just calculating and filing payroll taxes; it requires a comprehensive knowledge of general employment laws, taxation, data security, compliance, regulations, etc.
By outsourcing payroll, you will entrust these tasks to specialists trained and experienced in effectively managing payroll-related responsibilities. They will also have effective management systems, making them more likely to avoid mistakes involving taxation and compliance issues.
Though data security risks don’t completely disappear, transferring information like Social Security numbers and bank account details to a third-party provider does reduce exposure. This is especially true if the company has experience negotiating contracts with third parties.