There are many reasons as to why an employer decides to outsource their payrolls. However, before we move to the ‘why’, let’s first discuss the ‘what’. What is a payroll? Payroll is basically the total wages that the company pays its employees. Every business owner needs to keep track of how much they’re paying and to whom. In many cases, the employer himself/herself decides to keep track of such calculations, but it becomes quite a strenuous task for many, which is why they decide to opt for payroll outsourcing, which makes things a lot easier.
Reasons for payroll outsourcing
Many business owners see this as an alternative to forming an in-house payroll service. Why do that when you can simply hire a company that will handle all the filing record keeping for you? Payroll outsourcing can be cheaper, and more effective than having your own employees do the record keeping in many cases. However, this all depends on the individual company, so be sure to think about it carefully before you outsource your payroll.
That said, you also need to take into consideration the importance of proper payroll maintenance. Mistakes made in your payroll may subject you to penalties and fines from the government, something that you want to avoid at all costs. This is something that outsourcing your payrolls can solve. They have proper knowledge of the whole payroll procedure, as they have been trained at it. They know just how important it is to properly file your payroll and handle your taxes, both of which they carry out thoroughly.
Additionally, this eases your mind, as you know that there would be no errors in your payroll and you will not be subjected to penalties.
When do you outsource your payrolls?
As mentioned earlier, outsourcing isn’t for every company. If you run a company in which the employees’ work hours vary per week, then outsourcing payroll can be both cost effective and will also help you save time. However, if you run a company that has stable payroll expenses and contains only a handful of employees, then it might be better for you to handle the payroll internally.
How do you choose a payroll service provider?
First off, you need to see the services that they provide. Some of the basic services that they will provide include tax and payroll calculations for every employee, providing management reports, and delivering and printing checks. They also provide other services, and if you require specific services according to the needs of your company, you should hire a payroll service provider according to that.
Aside from offering specific services to cater to your business’s needs, they also offer customer service, and this is important, as you will be constantly communicating with your payroll service provider. Also, it is recommended to hire a service that is within a reasonable distance, as you might need to pick up your checks during emergencies.
Outsourcing payrolls is important for many businesses, as this makes the day to day running of the business a lot smoother, since the employer doesn’t need to worry as half as much about the payroll anymore.[Read more...]