The idea of outsourcing payroll to a payroll provider has been a hot topic in business lately, and one that's no doubt controversial. While many have heard of some of the pitfalls, too few have taken the time to focus on the benefits—or, for that matter, on whether the decision is right for them. Like all things, outsourcing your payroll is a choice that you as a company need to make for yourself. What's suitable for some might not be suitable for others, so it's important to make an informed decision.
In-house is naturally the most common type of payroll processing right now, largely because it's traditional and familiar. Many companies, both large and small, rely on this method day-to-day to keep everything in order but of course, there are some major issues.
First off, payroll processing is by far one of the most expensive aspects of business—especially since it's linked so intrinsically to human resources, yet another big expense. It puts a lot of pressure on your budget, and on the people in charge of it because it's a complicated part of daily operations. Many companies tasked with cutting costs have focused their efforts on stripping their payroll and human resources department, which can take a serious toll on the quality of the work. They often feel like they have no choice—even large companies know that they need to employ a full team (often full time as well) just to maintain their operations.
Don't forget—payroll isn't just about financial planning, it's about legal compliance, human resources, and a great deal of accounting. Many small businesses can't afford to have more than one person managing all those duties, and this can get complicated quickly. A common situation for small businesses and startups is that one person working on a part-time basis addresses all these concerns, which means when questions arise, they're not always readily available to help.
On the other hand, those who have started taking advantage of a payroll provider have found a great deal more freedom. Not only is it a great deal less expensive than handling all the responsibilities in-house, but you'll get the experience and hard work of a full team for less money. Perhaps most importantly, they're available whenever you need help or answers, no matter what time of day. Communication is their foundation, and that means building a relationship based on trust. That’s something we can all benefit from.
All of this sounds fantastic in theory, of course, but we also must consider what it looks like in practice. A payroll provider can act on your behalf to file taxes, pay your workers, and manage complications like garnishments, vacation payouts, benefits, and more. They're also great legal minds, considering compliance at ever turn, which can help you minimize your risk in terms of costly errors and mistakes that could turn into audits, fines, and even jail-time depending on the severity. They're always on top things that may be hard to keep track of otherwise, such as changing laws, regulations, policies, or anything else that might effect how you do business. It saves you the time and the money that you might spend training your own specialized set of workers. Imagine the efficiency you can achieve with a payroll provider—freeing up your budget, spending less time training people and researching legal changes, simplifying your workload, and putting your in house employees to better use elsewhere. Especially for smaller businesses that can't afford to manage all of these concerns or otherwise lack the necessary tools, payroll providers have been changing the game. Consult with one today and find out if it's the right decision for you and your business.