Startups, small businesses and even companies that are already in a growth mode resort to do-it-yourself strategies to control operational costs. Back office functions such as payroll processing are assigned to dedicated internal departments. This may not be the most efficient solution given the expertise required to fulfill all aspects of the payroll process from tracking attendance, accurate payroll preparation, payout management and compliance with complex federal and local laws. Outsourcing payroll to third party professionals is a viable option with numerous upsides.
More Time to Focus on Core Business
When payroll processing is outsourced to a professional team, you and your staff can spend more time and resources on your core competencies. This is especially important if your product or expertise is in a highly specialized field. It makes financial and logistical sense to spend your time on the functions and processes that you are really good at and that define your business direction.
Payroll Outsourcing Allows More Resources to Deploy on Primary Operations
When you outsource payroll processing to a company that specializes in this service, you may have to eliminate an entire department, which means more resources available for use in functions that directly impact your operational processes. You can hire more researchers, sales people or customer service reps instead of payroll clerks. Payroll outsourcing costs should be lower than compensation, benefits and operating costs for an entire department.
Online Management Options for Everyone
Dealing with a payroll vendor can be accomplished mostly online. Companies like iPS provide a suite of payroll management services that encourages online exchange of information and data tracking. Payroll strategies may include online delivery of payroll data, including pay slips, payout advisory and online reports. Direct deposit to the accounts of your employees is also a useful and convenient option, ensuring timely wage payments without writing checks or counting cash.
Tap into the Expertise of Payroll Providers
As experts in their field, payroll providers are aware of changes in legislation and industry practicesthat may have a direct impact on payroll strategies. Payroll processes should comply with federal and tax guidelines at all times as there are penalties involved for errors, omissions, inaccuracies and every instance of non-compliance. Outsourcing your payroll management to a reliable provider will ensure compliance with IRS, state and local regulations to avoid hefty penalties. The IRS recommends using the Electronic Federal Tax Payment System to pay your payroll taxes.
Consult with Payroll Experts as Needed
One of the anticipated downsides of using contract services for payroll processing is communication glitches. Employers may fear losing control of the payroll process, but this is untrue. Professional payroll services firms will have a system in place for direct contact with the representative in charge of your account. As a client, you should be able to reach a representative as needed and without playing phone tag on a 1-800 number.
Better Data Security
Professional payroll providers should have a hack-proof system of collating, sorting and analyzing data. As professionals, these companies have a data security system that may include privacy tools and back-up systems to prevent data loss. Payroll data should be accessible to authorized personnel only. Data security and confidentiality are part of the package of services provided by payroll management companies.