Growth is a top priority for startups and SMEs alike. However, as you grow, your time is consumed by many business functions, such as growing your business via sales, marketing, recruiting, training staff, and managing payroll. Outsourcing payroll can add significant value to your business while simultaneously freeing your time to focus on other important business matters.
Let’s look at the top ways outsourcing payroll can add value to your business.
Outsourcing Payroll for SMEs
There is a common misconception among Small to Midsize Enterprises (SMEs) that only large corporations can afford to outsource their payroll department. Coupled with the fact that many entrepreneurs find it difficult to delegate the various parts of their business, the mere mention of “outsourcing” can be an intimidating step to take.
The truth is, outsourcing your payroll is highly beneficial to the growth and future of your company. Let’s explore the top ways outsourcing can work to add value to your business.
Focus on Your Business
Payroll is commonly known as a headache for small business managers. Aside from the expansive investment of time, maintaining withholdings, deposits, checks, benefits packages, and keeping up with the evolving income tax laws, can frazzle even the most number-savvy business owners.
However, outsourcing payroll services isn’t solely about transferring off time-consuming tasks. Outsourcing payroll allows business managers/owners to delegate a time-consuming task that, for most companies, is not related to their core products or service offerings. Outsourcing also frees an entrepreneur to focus on growing their business, engaging with their clients, and improving their products/services.
Take Advantage of the Latest Technologies
Thanks to the latest advancements in technology, outsourcing has become a key element in payroll strategy. Thanks in part to secure online portals, SaaS and cloud platforms, what was once managed internally at an exceptional cost, is now affordable, easy, and accessible. For payroll services particularly, innovative technology has made it so effortless to outsource to dedicated payroll specialists.
Modern employees expect easy payroll options, such as direct deposit and easy-to-access records of their pay information. The larger your business becomes, the more employees it has. Outsourcing your payroll allows your company to gain access to the latest payroll technologies without the cost of purchasing the payroll systems. Payroll providers invest in the best technologies and work to maximize the benefits, so their customers ultimately benefit and save time and money.
Improves Reporting and Compliance
Payroll in and of itself is a full-time job. Between wage, hourly, and tax regulations to filing forms, deadlines, and evolving financial legislation, complying with all of the necessary payroll requirements can feel overwhelming. When you outsource your payroll, your company gains access to a dedicated team of payroll specialists.
This helps to guarantee your company is compliant with all payroll laws and regulations. Best of all, they are in the position to dedicate all of their time to handling all of your payroll expenses. Unlike managing it in-house, and taking your team from their other duties. Additionally, a payroll service will create regular reports to provide your business with a clear understanding of where you stand and where you’re headed.
Minimize Error and Risk
Aside from handling direct deposits, bonuses, and compensation packages, payroll is also in charge of filing reports. Penalties for inaccuracies, omissions, or late payroll filings can be very expensive. Mistakes lead to audits and penalties. Government rules and regulations are always changing and business owners can’t be expected to stay on top of these changes. Most SMEs and entrepreneurs aren’t well versed in the nuances of payroll regulations. At the same time, payroll is legally responsible for any occurrences of misrepresentation or a failure to accurately report/file payroll expenses.
Professional payroll service providers are up to date on all current regulations and changes in tax rates/laws. In fact, outsourced payroll providers calculate payroll taxes, manage filings and payments,and assume the cost of penalties associated with incorrect calculations or late payments (as long as your company provided the essential information and funds on time).
Enhanced Employee Access
Outsourcing payroll allows your company to reduce costs and provide quicker and more efficient access to their payroll information.
Employers gain access to:
- View payroll reports, timesheets, and invoices
- Employee information and data
- Easily enter new employees
- Manage and offer benefit enrollment
- Communicate with employees
- Create custom reports
- Track PTO (paid time off)
- Total Compensation Reports (TCR) and more
Employees gain access to:
- Direct deposit
- Review paychecks
- Review benefit information
- Update their personal information (such as changes in name or address)
- Corporate documents
- Online benefits enrollment
- Easily report payroll inaccuracies or errors
At SOURCEitHR, we take all of the hassle out of payroll so you and your employees can focus on what matters most! From completing and verifying payroll calculations to managing overtime hours, managing unpaid leave, salary increase, and filing taxes, we’ve got you covered from A to Z. Contact a member of our team to learn more.
Co-Founder & Managing Partner