As a company grows, it becomes necessary to find a permanent solution to payroll processing. With the many details, regulations, procedures, and filings involved with payroll processing, delegating payroll responsibilities to an existing employee, or trying to take care of it yourself, becomes an unsatisfactory option. Some business owners or managers try to solve the payroll puzzle by hiring an in-house payroll clerk. This solution is probably better than trying to manage payroll yourself, but it has some serious drawbacks.
HR Overhead Costs
When you hire a payroll clerk, you take on numerous new overhead costs. First off, there's the cost of hiring, which includes advertising the job, reading through resumes, interviewing, and getting your new employee integrated in your payroll system. There's training to consider, which could involve off-site training, courses, and conferences to get your new employee up-to-speed with current payroll regulations. Your new payroll clerk needs a place to work, equipment, and software. Additionally, you'll need to consider the costs you incur with a new employee: benefits, insurance premiums, your portion of CPP contributions and EI premiums, and paid vacation and sick days.
Payroll never sleeps. Your employees need to get paid, and your government remittances must be submitted continually, whether or not your payroll clerk gets sick, takes a vacation, or needs personal time away from the office. Remittances must be sent in on time if your company is going to avoid fines levied by the CRA, and a single payroll clerk managing payroll processing for a whole company may have a hard time meeting every single deadline. Outsourced payroll processing, on the other hand, can manage payroll no matter what. They can guarantee that everything will be done in a timely fashion, and they don't require vacation days or sick leave.
A good payroll clerk may get a firm grasp on everything it takes to manage your payroll effectively. Getting to this point takes time and consistent effort because payroll is complicated, and the regulations change from year to year. What will you do when your expensive, painstakingly trained payroll clerk gives notice and leaves your firm? You'll be back at square one, looking for a new employee who doesn't understand the ins and outs of your company and may require substantial training before you can feel comfortable with the state of your payroll again.
These problems can be avoided by turning your payroll processing over to an outsourced payroll processing company rather than hiring your own clerk. With outsourced payroll processing, you don't have to worry about adding to your HR overhead costs. Payroll won't require any square footage of your office space, it won't require that you buy any new equipment or specialized software, and you won't have to pay additional employee benefits. You also won't have to worry about the state of your payroll when someone wants to take a vacation. You'll just know that it always gets done faithfully, no matter who is in (or out) of the office. Finally, there are no turnover worries when it comes to outsourced payroll processing. Although your contact at the outsourced payroll processing company could change from time to time, your payroll will always be handled professionally and in a timely manner. Compared with outsourced payroll processing, hiring your own in-house payroll clerk may be the more expensive option.