10 Great Reasons for Outsourcing your Payroll
There are lots of great reasons for outsourcing your payroll and in this article we’ve listed the top 10 reasons why more and more organisations are considering payroll outsourcing.
In an era defined by ever-increasing pressure to reduce cost and improve efficiency, outsourcing payroll has fast become the preferred strategy for many of the leanest and most profitable organisations. Increasingly, employers recognise the real commercial and transformative value of outsourcing this otherwise costly and time-consuming function. For many organisations in-house payroll is one of their biggest discretionary spends. If you calculate the hours your employees spend on payroll-related activities, plus payroll software costs, training costs and administrative costs you will be surprised by the savings payroll outsourcing services can provide.
The payroll function can consume a large proportion of your staff resources, particularly where payroll processing is ancillary to the processors core role, or when the processor is not specifically trained in payroll. Payroll outsourcing frees up these resources and allows staff to concentrate on more essential tasks. The outsourced payroll model not only ensures your payroll is processed cost-effectively but also enables you to choose the service level most suitable to your needs and deal easily with any variation in resource requirements.
To ensure your payroll is calculated correctly and meets the on-going legislative and calculation requirements, payroll processors require continuous training. Software is a great tool to help with the calculations but it’s only as good as the information that is fed into it. Employers often overpay because their payroll processors don’t understand the calculations behind the software or what changes they need to make to reflect individual circumstances. In contrast outsourced payroll providers strive to help clients meet their employer obligations without all the technical jargon and ensure that their employees consistently get paid the correct amount at the scheduled time.
No two companies are the same. No two payrolls are the same. Individual personal circumstances or payment structures can quickly complicate payroll processes. Inexperienced payroll processors can easily make mistakes or oversights which can accumulate and become costly. It pays to have a wealth of experience at your disposal, but this is unobtainable for most small in-house payroll departments. By outsourcing to a team of experienced and qualified payroll professionals payrolls are given the attention they require and managers can be confident that their outsourced payroll provider remains up to date with all the ins and outs of the latest payroll legislation.
Fraud is one of the many risks commonly associated with in-house payroll. Payroll processing provides ample opportunity for fraudulent activities and newspapers are rife with stories of in-house payroll fraud. But most employers do not have the time to closely supervise their business’ payroll for time and rate abuses and other shady activities.
Are you confident that your payroll data is always secure? Do you know how to spot fraudulent activities within your payroll function? Do you understand the implications if fraud has occurred in your business? Reputable and trustworthy payroll outsourcing services will have ISO and ISAE accreditations which provide demonstrable proof of their payroll service’s commitment to quality and security. Payroll Bureaus which have achieved these accreditations will adhere to stringent procedures to minimize the risk of fraud and will have the relevant security in place to protect your valuable and confidential personal data.
As payroll service providers are specialists, they can process even the most complex payrolls at a greater speed. Their specially designed processing systems and controls will ensure a quick turnaround time on your payroll eliminating missed deadlines and delays.
For many organisations, the increased levels of payroll complexity combined with considerable time-pressure for payment and Revenue filing, as well as low levels of training and legislative awareness has seen error rates increase. Additionally, typical turnover rates of between 12% and 17%, for in-house payroll staff, makes staff and knowledge retention challenging and organisations are forced to constantly re-recruit and re-train new staff or employ additional workers as a contingency.
Payroll errors can be costly both financially and to a business’ reputation. A good payroll outsourcing service is far less likely to make a serious error than in-house staff. By engaging a reputable payroll outsource provider, you’re benefiting from their expertise, knowledge and finely tuned systems and processes which can significantly improve payroll accuracy.
Payroll needs to be done on time. Deadlines are dependent on the people involved. In-house payroll activities rely on limited resources to meet their payroll deadlines. By choosing a professional and established payroll provider, output, speed, and quality remain consistent regardless of holidays, sickness, or other planned and unplanned leave. Payroll staff absences can cause a logistical nightmare come payday. Payroll Outsourcing ensures that your payroll deadlines are met consistently and reliably.
Reputable payroll bureaus offer flexible solutions to meet individual business needs. Most outsource payroll providers provide options that enable you to choose the service level best suited to your requirements providing you with the flexibility to meet changes in your business’ needs. Outsourcing payroll means you pay for what you need – no more, no less!
There’s a lot to be said for the peace of mind that payroll outsourcing can bring to a business owner or manager. Not having to worry about IT crashes, payroll security, staff absenteeism or changes in legislation. No headaches, no hassles, no stress, no worries! By outsourcing your payroll, you’re free to focus on running your business knowing your payroll obligations are dealt with correctly, efficiently, and compliantly.
For more on outsourcing payroll read:
At Paycheck Plus, our experienced and IPASS qualified Payroll Team, work with you to ensure your payroll is operating at its most efficient – both for you the employer, and for your employees. Our tailored payroll services are structured to meet your specific payroll requirements while our range of value-added services ensure that your outsourced payroll department fits seamlessly into your business.