Many business outsource their payroll processing, but why do they do it, and what benefits does it bring them?
While some businesses opt to handle running payroll functions in-house through manual bookkeeping or do-it-yourself payroll apps, small business owners have increasingly come to prefer the expertise of professional payroll providers.
At Propay Partners, some of the usual pain points faced by our clients before they partnered with us were high volume of payroll changes in shift patterns and staff rotation, sudden & spontaneous changes in payroll and absence of structured payroll operations in SEA.
No matter how many employees a business has, processing payroll demands a lot of time and attention to detail. Every pay period follows the next, requiring business owners or their payroll personnel to enter large amounts of data physically and double-check on keying errors. That’s time taken away from critical tasks like building revenue and serving valued customers.
Time saved is money saved, so the adage goes. A lot of time goes into calculating payroll each cycle, generating reports, preparing and remitting payroll taxes. When evaluated on a per-payroll period or a monthly basis, a ‘time and cost’ analysis may well indicate the benefits of an affordable full-service provider.
Payroll processing is a complex and potentially risky business operation. There is always a risk of identity theft, embezzlement, or tampering with company records for personal gain. There's also the risk that comes with using payroll software from companies that aren’t well established and may be out of business or are bought by smaller companies. By contrast, outsourcing payroll to a stable, experienced provider can offer a "safe haven" for your confidential payroll data.
A lot of business owners don’t have the time and aren't experts in the area of regulations. However, they are still legally responsible for any cases of misrepresentation or a failure to accurately report employment taxes to federal and state government agencies. These mistakes can lead to audits and penalties which is something no business wants or needs. Government rules and regulations are always changing, and business owners can't be expected to stay on top of these changes. Professional payroll providers, on the other hand, must stay current with rules, regulations, and changes in tax rates. Some even have whole departments dedicated to helping clients stay aware of regulatory updates, so they can make more informed decisions about their businesses.
And most of all, payroll can sap internal time and attention from core activities. You can save yourself a lot of time, money, and headache when you outsource your payroll, so you can get back to growing your business.
