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The Top 6 Advantages to Outsourcing Your Payroll
Published on Oct 12, 2010
Read 'The Top 6 Advantages to Outsourcing Your Payroll' at 'Time to Start Up,' the small business blog by BizFilings.
With the current challenges facing small businesses, business owners are looking to streamline processes and focus their efforts on the tasks that will have the most positive impact on the bottom line. Outsourcing payroll is an excellent alternative to in-house payroll processing for today's small businesses. While there are many reasons business owners choose to outsource payroll, here we've identified the top six advantages:
Reduce costs. When comparing the cost of an outsourced payroll provider to your in-house payroll expenses, consider the amount of time you and your employees spend on payroll-related activities. And don't forget expenses such as the cost of printing checks, computer software, training and support. Outsourcing your payroll functions will most likely save you money because your payroll provider will handle all of these things for you. Many professional payroll providers offer packages for small employers starting as low as $50 per month.
Reduce workload. Payroll can be a time-consuming headache for many small businesses. Keeping track of benefit accruals, garnishments, new hires and terminations as well as federal and state regulation changes can be daunting tasks. Each year significant amounts of time are spent preparing W2s and 1099s, and ensuring that they are sent out on time. Outsourcing payroll allows employers to concentrate on their core business and frees up the business owner, human resources or accounting personnel to work more on strategic tasks.
Avoid IRS penalties. Penalties for errors, omissions or late payroll tax filings can be very costly. Many outsourced payroll providers will calculate payroll taxes, manage filings and payments and will assume the cost of penalties due to incorrect calculations or late payments so long as you provide the necessary information and funds on time. Keeping abreast of state, federal, local and industry-specific regulation changes can be at best a real challenge. A reputable outsourced payroll provider has a staff dedicated to keeping up to date on all of the changes that could affect your payroll, ensuring that you stay in compliance.
Increase reliability. Payroll companies have a full staff on hand to process payroll. This is a huge advantage for small businesses because the payroll expertise does not leave if your employee does and issues such as holidays, vacations and illnesses become a thing of the past.
Expand payment methods. In addition to printing and shipping checks directly to your door, most payroll companies also offer the convenience and security of direct deposit services. Because pay is deposited directly into your employees' accounts, having to put a stop payment on a lost paycheck and reissue it becomes a thing of the past. Many payroll providers also offer a paycard service for unbanked employees, usually at little or no cost to the employer.
Eliminate payroll pain and worry. With the help of a professional payroll service provider, the hassle and pain often associated with processing payroll is gone! You provide the basic information, and your payroll company takes care of the rest. And with guarantees of error-free payroll and tax filings and payments, you can eliminate the worry that many experience when it comes to paying employees and taxes correctly and on time.
About the authorTerri Tennant is the director of business development for CompuPay Inc., the fourth largest payroll provider in the United States. Since 1980, CompuPay has worked with businesses with one to over 5000 employees to streamline their business processes, improve productivity and save money through their offerings of easy, flexible payroll solutions.