The Benefits of Outsourcing Your Payroll Services
The Benefits of Outsourcing Your Payroll Services
As a business owner, you know that peace of mind is priceless. If you’re confident that your accounting activities are being handled proficiently and professionally, it’s easier to manage all of the other parts of your operations. While some companies opt for managing their payroll services in-house, many prefer the expertise that a third-party payroll provider can offer. Are you curious about outsourcing this essential service? If so, it’s important to know the benefits it can provide. Today, we’re sharing some top reasons why this approach could make sense for your business.
1. Saves Valuable TimeAccording to one survey, small business owners who do payroll themselves spend three to five hours each month on this task alone. In all, 40% of owners spend at least 80 hours per year on payroll, taxes, and accountant consultations. No matter how many employees you have, the reality is that payroll takes time and attention to detail. This is time that your team members could be spending driving revenue, pursuing new leads, or serving existing customers. When you outsource your payroll services, that time becomes yours again. As your business grows, you can add more services to the mix, such as benefits administration. Unless there’s an issue, your provider will only need to reach out once per pay period to notify you that everything has been processed successfully.
2. Ensures Fewer ErrorsEven the most skilled accounting experts can make mistakes. However, this risk becomes higher when your employees are asked to complete payroll work in addition to their other job-related demands. Payroll consultants are dedicated to this task and aren’t pulled in many different directions. They’ll be able to give your books their full focus and attention, which minimizes the likelihood of manual errors. They also have access to automated processing tools that eliminate much of the labor-intensive aspects of the job, so data entry mistakes are less common. Even a small slip-up can result in costly consequences, including tax audits and penalties. Trusting this task to someone well-versed in all aspects of payroll processing, including government tax regulations, is essential.
3. Helps Maintain ComplianceGovernment regulations around payroll processing change on a regular basis. You’ll need to stay on top of every revision to ensure that your business is reporting everything in an accurate and compliant manner. It can be challenging to stay abreast of all of these updates, especially with so much already on your plate. A third-party payroll provider knows how to monitor these requirements so you don’t have to. They can also help you complete and file all of the necessary paperwork to ensure compliance.
4. Enhances Data SecurityIt goes without saying that payroll data is extremely personal and confidential. It’s critical to protect it at every turn to prevent security breaches, identity theft, embezzlement, or any other malicious attack. When you outsource this service, you can rest assured that your provider will have access to state-of-the-art technology that enables secure handling and processing at every turn. As long as you do your due diligence and choose a reputable, stable provider, this is a smart way to ensure that your sensitive payroll data stays secure. These providers will offer several layers of protection, including redundant backups and multiple server locations, to keep your records safe. They’ll also store and protect your data in high-tech systems that reduce the risk of unauthorized access.
5. Facilitates Data IntegrationWhen you outsource your payroll services, many providers allow you to integrate that data with other HR applications, including time and attendance and benefits. Not only is it easier to keep everything under one “roof” but it also helps maintain data accuracy. Benefits management can be an especially complicated and time-consuming task, especially as your business grows. You must deduct employee contributions from payroll, which can get tricky if you offer various healthcare plans. Each plan will have its own contribution amount, as well as variances based on the employee’s status and salary level. Your payroll provider can help align all of these deductions and ensure they’re correct. They’ll also verify that your plans comply with regulatory guidelines, and ensure that the proper payments are sent on time to each provider to avoid a lapse in coverage. With this service, you can:
- Add or remove employees from your benefits programs
- Deduct the correct amounts from each paycheck
- Share benefits information directly with employees
6. Empowers Employees With Self-ServiceIncreasingly, providers are offering tools that allow employees to manage some aspects of their payroll-related duties. These include:
- Submitting requests for time off
- Filing onboarding materials
- Printing tax documents
- Updating benefits and tax forms
- Updating personal information
- Accessing pay stubs
- Changing shifts