Payroll 101: Should Small Businesses Consider Outsourcing Payroll?

Entrepreneurs and small business founders often have a hands-on approach to management. There is often a tendency to do manage everything in-house, but there are two aspects that often need more attention – HR and payroll. The concept of payroll outsourcing is not new, but small businesses and startups do have reservations with that, primarily because it means giving away sensitive information. Outsourcing payroll does come with many benefits, and in this post, we are discussing further on why this could be an ideal choice for businesses that are just starting out.

Decoding the need for payroll outsourcing

Payroll processing can be a time-consuming process, and more importantly, it is important to ensure that that everything is done in compliance to the existing rules, norms and regulations. A lot of businesses end up paying penalties and fines, because payroll filings were not in sync with the industry norms and standards. To add to that, payroll is an exclusive branch of HR, and it only makes sense to hire a team of professionals for the job, which again may not be a viable economical choice for smaller companies with limited resources.

Cut down costs effectively

One of the prime advantages of payroll processing is cost reduction. Businesses can hire a company for the job, which will take a fraction of the cost of having an in-house team. It is also possible to free up internal resources and reduce risks involved in calculating payroll. The good news is most payroll outsourcing services offer incredible support in maintaining systems, so getting access to relevant data doesn’t have to be complicated. This is also different than having a payroll software, because that requires extensive monitoring, regular data entry and further updates.

What to expect in terms of services?

Most payroll outsourcing companies offer help with basics like salary calculation, pay slip delivery, maintenance of records, processing deductions, collection of pay data, absence and holiday information, details related to joining of new employees and termination of existing workers. Keeping up with regulatory authorities and ensuring statutory reporting are other things you can expect. Most companies also offer assistance with things like accident insurance applications.

In conclusion

If you are considering payroll outsourcing, find a company that’s accessible at all times. Ask about their expertise and range of payroll services they can provide for your business in particular. Compare the costs with other payroll outsourcing companies and software before taking a call.