Payroll in the sense of “money paid to employees” plays a major role in a company for several reasons.
From an accounting perspective, payroll is crucial because payroll and payroll taxes considerably affect the net income of most companies and because they are subject to laws and regulations. (Source)
Irrespective of the size of the company, its payroll process can be a complicated and time-consuming task. Typically payroll functions include everything from determining employee remuneration and taxes, to updating leaves, vacation and sick pay and deducting employee-contributed payments for benefits. Thus it makes more sense for them to outsource payroll operations than managing the process internally.
Payroll outsourcing has proven to reduce the time employees spend calculating payroll or considering tax obligations, preparing cheques as well as providing comprehensive reports to the management. Outsourcing firms are able to offer better services such as automated signatures, envelope stuffing and direct depositing salaries in employees’ accounts.
It is for these reasons that a large number of companies are increasingly relying on payroll preparation services to help them better manager the administrative burden of paying employees. While outsourcing payroll appears to be a time saver it is also a smart business decision.
To sum up, outsourcing payroll can cost the company almost half of what it would to consider doing it in-house. Leveraging the services of an expert also eliminates the need to hire a full-time payroll staff. Managers and employees are able to work on other aspects of their business in a more efficient manner.
The other benefits of having an employee payroll service include:
Payroll can become a costly affair considering the large number of rules and regulations that are constantly being upgraded. Getting the help of a service provider can save companies money on legal fees, and put compliance in the hands of a business that understands these legal issues.
Offer more convenience:
A lot of payroll service providers let their clients update their employee payroll information on an online portal. Employees can view all of their data making it a much more transparent process. The management needs to provide basic information of employees such as number of hours worked, deductions and salary amounts and the rest of the entire process can be carried out by the service provider.
By leveraging the expertise of a payroll company, management can free their employees who had to process payroll in addition to their other responsibilities. They are thus able to have more time to pursue other important value-added and revenue-generating activities. As payroll management usually takes up a lot of time, removing this burden helps employees utilize their expertise for the benefit of their organisation.
Accuracy is an important factor for payroll companies if they hope to scale their business. The employees are experts who have update knowledge about the all new rules and regulations related to employee payroll. It helps them stay abreast of the game and provide valuable services.
Professional payroll service provides help focus on their core expertise and improve productivity. Thus be careful when you select a service provider. Preferably get at least approaching the top 3 provider and get quotes from them before deciding on a payroll service.