There are numerous factors that determine whether a business will opt for an in-house department or outsource payroll services. It’s important for any company to ensure that risk is minimized with an accurate and professional payroll provider.
There are usually hefty penalties to pay to the IRS for late or incorrect filings. Keeping up with the regulations and maintaining confidentiality at the same time is quite challenging, and one of the main reasons business decide to outsource. These are some of the major factors that business owners consider when faced with the issue of in-house payroll department vs. outsourced payroll provider.
In essence, outsourcing offers the best option since companies get to enjoy many benefits. It’s easier to identify areas that require streamlining and the best practices that will guarantee a swift payroll process this way. Improvement can, therefore, easily be achieved through it. Conversely, the in-house system is not as efficient because you are responsible for everything – complying to changing regulations, keeping records current, paying employees, and much more. Here’s why you should consider outsourcing your payroll and make life easier:
It’s a well-known fact that very few companies have disaster recovery plans in place. Contingency plans are crucial for any organization to continue normal operations when disaster strikes. Good payroll service providers have emergency plans in place to ensure your payroll runs smoothly no matter what.
Plus, in most cases, payroll service providers will be in a different location than your business, which will prevent them from being affected by the same disaster that might affect your business.
Focus on Human Resources
In-house payroll will take a lot of time from the HR department which will deter progress as a result. There are numerous duties to be conducted during payroll which is why outsourcing is the best. When tackling the issue of in-house payroll department vs. outsourced provider, it will clearly emerge that the latter option will leave you with adequate time to allocate to other important tasks.
When a business outsources payroll, they are able to leverage payroll provider’s latest software and services to make payroll a breeze without an additional expense of having an IT department.
In addition, payroll providers spend more resources on data security than an ordinary business normally would. Making sure that the data is secure and confidential.
Many businesses suffer when they need to process short-term payments to their employees. The process is usually lengthy and can affect normal business operations when handled with an in-house payroll department. Outsourcing payroll will provide flexibility since providers are ready to accept any changes that may crop up while the major calculations are still underway. Nonetheless, confirm this with your service provider before signing the dotted line.
Outsourcing anything is always a better way to save money, since you don’t have to hire employees and pay for benefits. This also applies to payroll. When you outsource, you don’t have to have a payroll employee on staff. It eliminates salary and benefits expenses right off the bet. Plus, it also eliminates resources wasted on managing the employee(s), which can be put back into the business to help fight through the turbulent economy.
In summary, when faced with in-house payroll department vs. outsourced payroll provider, get every relevant office in the organization involved. This is a task that needs to be tackled in ample time. This will guarantee continuity and smooth flow of business operations. Although there are always 2 sides of a coin, payroll outsourcing is without doubt the best option here. After all, which organization doesn’t want to benefit from a flawless process of handling payroll that will eliminate any occurrences of getting fined by the IRS?
Are you considering outsourcing payroll for your business? Share your comment and thoughts below.
Find out more tips here: http://www.forbes.com/sites/stephendunn/2011/08/16/tips-for-payroll-outsourcing/#58e43b611a9f