Why You Should Outsource Your Payroll
Save Time & Money While Avoiding Headaches
By Chris Keith
In today’s complex business environment, business owners, managers, and HR professionals have a lot on their plates. From forming long-term strategies down to the daily operational decisions—and everything in between—you have many responsibilities. Oftentimes it is difficult just to keep up, much less to find the time to pursue growth.
One strategy for freeing up more of your time for other important business functions is outsourced payroll. To get a handle on your business and find time to pursue growth opportunities, many choose to outsource their payroll functions. Why is this a good plan for so many? Payroll management can be a time-consuming and sensitive task. Putting it into the hands of an expert frees you up to focus internal resources on other important areas of your business, such as growth. Read on for an in-depth look at the benefits of outsourcing your business’ payroll functions.
The Benefits of Outsourced Payroll Services
Outsourced payroll services can have a wide variety of positive benefits for your business, including:
1. Saving Time
Oftentimes, businesses that take responsibility for their own payroll functions end up investing a large amount of time in it. Why is this? It takes a lot of time for small business professionals to learn and perfect the processes involved. And even once the processes are learned, it takes significant time to carry out regular payroll duties and keep up-to-date with federal and state legislation. If a member of your team is responsible for payroll, it can end up taking a lot of his or her time—time that can create more value if focused in a different area. When you outsource your payroll functions, your team can focus on big projects rather than payroll compliance.
2. Saving Money
The money savings that outsourced payroll provides you is two-fold. First, outsourcing payroll is beneficial because it can reduce labor costs. Businesses that outsource do not need to pay for a fulltime staff member to facilitate their payroll functions. Secondly, when you outsource payroll, you gain access to advanced payroll software—and the costly upgrades or subscription fees that it can entail—at no extra cost to your business.
3. Access to Seasoned Professionals
By outsourcing your payroll, you have access to a team of expert professionals in the field. Your business is in the hands of professionals who are well-versed in the complexities of payroll, including state and federal tax regulations and compliance. Mistakes in these areas can lead to both audits and costly penalties. Outsourced professionals can administer your payroll functions smoothly and accurately – and you don’t have to keep up with the ever-changing regulations!
4. Access to Advanced Technology
Oftentimes, when you outsource your business’ payroll functions, you gain access to key technologies. This includes items such as detailed records keeping, direct deposit, self-service applications for your employees, mobile apps, reporting functions, and more. As a small business, you gain access to systems that would be more expensive to purchase in-house.
5. Reduction of Risk
Another advantage of outsourcing your business’ payroll functions is a reduction of risk. For one, you can be confident that the work your outsourced professional does is accurate. They know how to avoid mistakes, especially those that lead to costly IRS penalties. Secondly, the payroll specialist knows how to deal with any payroll issues that arise. Due to their experience, it is likely that they have encountered such a problem before and understand how to handle it.
6. Better Security
The risks of fraud and theft—both internal and external—are high when it comes to payroll. Internally, if you have one person responsible for payroll functions, the unfortunate truth is that it is all too easy for them to take advantage of the situation. Externally, a lack of strong security can result in costly record theft, either through data breaches or phishing scams. Outsourced payroll professionals have access to both highly secure servers and systems and high-level training in avoiding scammers. Additionally, they are overseen in their work.
It is not hard to see that outsourcing your business’ payroll functions has a wide range of benefits. Ready to start saving time and money? You can earn more about ABBB’s customized payroll solutions here or by contacting your ABBB advisor.