Actionable Research recently conducted a survey on CPAs. Over 75% of CPAs felt that their clients do not have the required expertise to handle the intricacies of payroll processing. 68% suggested that their clients can outsource payroll and utilize their time on the other demands of their business.
In the past, businesses have handled payroll processing internally through in-house bookkeeping, manual bookkeeping or payroll software. However, with outsourcing coming into the picture, more and more businesses now prefer the expertise that a professional payroll service provider can offer. By outsourcing payroll, companies have been able to focus more on the strategies and processes that directly affect the welfare of their business.
Here are five reasons why several business owners find it more advantageous to outsource payroll:
1. Stay compliant with government regulations
Mistakes in payroll are costly, as errors can lead to severe penalties and audits. This is a situation that no business wants to face. According to a recent IRS estimate, every year, more that 40% of businesses in the United States pay heavy penalties that cost over $800. The penalties are usually for incorrect/late payments and filings. Another problem is that government regulations and rules are always being altered and it is difficult for businesses to keep up. On the other hand, your payroll service provider will always be up-to-date with the latest changes in tax rates, regulations and rules.
2. Save on time
Even if your business employs a large number of people, attending to in-house payroll processing can steal away a countless number of hours. As you might already know, a pay period is followed by another pay period, and each time you have to input a large amount of data. Later, you have to spend time double-checking for any errors. Payroll processing can take away time, that can be otherwise spent on other important activities, like customer relationship management. By outsourcing, you will only need to contact your customer service representative once during each pay period.
3. Benefit from better security
Payroll processing, unlike other business functions is quite complex and risky. Even if you have trusted employees, there is always a risk of embezzlement of funds, identity theft or tampering with company records. You will also need to question the safety and security of your company’s network/server. Ensuring the security of your payroll can indeed be a daunting task.
However, this is not the same with outsourcing. Most service providers have a redundant backup, multiple server locations and best-of-breed software systems to store and protect data. By outsourcing, you can enjoy enhanced security.
4. Save on costs
Time saved is equal to cost saved. By outsourcing payroll processing, you need not spend time or money on:
- Signing, distributing or printing pay stubs/pay checks
- Calculating the payroll for each time period
- Creating reports for in-house use
- Preparing and remitting payroll returns/taxes to government agencies
You can conduct a time/cost analysis to evaluate the benefits of outsourcing payroll.
5. Leverage the skills of professionals
Professional payroll service providers will only employ individuals who understand payroll processing in detail. By outsourcing, you can leverage the expertise of experienced payroll experts who have invested several years in understanding everything about payroll taxes. A payroll service provider will also ensure that your business always stays compliant with government regulations.
Huge savings in money and time, better data security and access to the skills of payroll experts are persuasive reasons to leverage the advantages of outsourcing payroll services today. What will be your decision? Let us know, by leaving a comment in the box below. We, at Flatworld Solutions love to hear from you.
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