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. Continue reading