Overburdening an individual with payroll duties can lead to non-compliance, which can result in substantial fines from various government agencies, incorrect payments to employees, and other issues that can cause employer/employee strain.
By outsourcing payroll duties to a dedicated payroll provider, a small-business owner can mitigate these potentially devastating situations and focus on growing the business.
Here are three great reasons to consider outsourcing the payroll duties in your organisation:
Outsourcing payroll duties can help a small-business owner save time in several ways. First, it eliminates the need to hire and train a payroll specialist for the business.
Second, with a dedicated payroll team already in place, there will be no wasted time researching current payroll regulations. The dedicated payroll provider already has a staff trained in payroll.
Third, because errors will be reduced, your time will not be spent trying to fix them.
In addition to these intangibles, weekly and yearly payroll processing will be eliminated – including; cutting and distributing paychecks, calculating and paying withholdings and employment taxes, preparing and distributing Forms W-2 and 1099 and handling employee payroll questions. As any small business owner knows, time is money and saving it is a great step toward increasing profits.
Figuring out the amount of money that can be saved by outsourcing isn’t as straight forward as it first seems. In many small businesses payroll duties may be split up among several people.
Any time spent inputting hours, calculating taxes, printing and cutting checks, or figuring withholdings is time taken away from their primary duties. If an employee has a question about his or her paycheck, tracking down the correct person to talk to can take even more valuable time. With an outsourced solution, there is minimal internal time cost and most employee questions can be handled by the provider.
The savings may be even more noticeable in increases in work completed by associates who were previously split between multiple job tasks.
Keep Out of Trouble
One of the most important reasons to outsource payroll is to eliminate the need to maintain a system that’s compliant with the changes in payroll tax laws.
It’s estimated that one out of every three small-business owners will be levied with at least $800 in penalties due to tax law violations in any given year. These penalties can come from violations such as miscalculations to missing filing deadlines. Payroll providers have systems to correctly calculate payroll and make timely payments. They monitor tax law changes and often have provisions to address their liability from a payroll or tax payment error.
Outsourcing payroll makes sense for any small business looking to streamline operations and maximize returns on investment. Using an outside company can mitigate costly government penalties, reduce payroll generation costs and allow employees to focus on their areas of expertise instead of having them wearing multiple hats.
Bottom line: outsourcing payroll saves cash in the long-run. You can find more information about payroll outsourcing here.