If you are overwhelmed by the idea of diving into non-core functions of a business, read on. This information talks about one of the administrative or back-end activities namely the payroll process and the benefits of outsourcing this service to another firm. It cuts to the chase and directly addresses various concerns business owners are facing in terms of functions like this.
Payroll, as we all know, if done correctly will put you ahead of the game and make a big difference on your business bottom line. And while basic payroll process is easy to handle in a small setting, it becomes complicated when more than a handful of employees are involved. That said, outsourcing payroll can be your best bet, and here are the reasons why.
- Free-up Time And Resources
By outsourcing payroll, you are transitioning the task of payments to a third party service. Since payroll is something that doesn’t directly impact sales, it is easier to delegate than handle all by yourself. Additionally, not doing payroll correctly will hurt your business tremendously. It can divert all your attention from your business dealings and core activities. Payroll, in fact, requires a considerable amount of time when it comes to paying taxes and following federal, state and local jurisdictions.
- Exposure to Technology and Expertise
This one might strike you as obvious in many cases. Why would you not avail the benefits of new technology through outsourcing? And the reality is: with new technology and access to experts, you can save a lot of time and money – one of the smartest things you can do when your business has the potential for growth. If you are fortunate enough to work with a reliable outsourcing company, you should take advantage of the perks they offer.
As for the number, there are more than 10,000 federal, state and local tax jurisdictions to deal within the United States. If not all, some of them may apply to your business. And it has been getting complicated to deal with these jurisdictions every year, as new laws keep popping up. With the kind of complexity level present, it makes every sense to hire a payroll service provider.
- Cost And Risk Reduction
Hiring an outside payroll service provider can go a long way, especially when it comes to reducing overhead cost and risks. In general, businesses can reduce more than 4 per cent of overhead cost by going with accurate time record rather than employee’s time. Having an automated system for recording time can save money and resources for big companies. Not reporting correctly or inconsistent time requirements can result in IRS penalty payment. Typically, businesses pay around $900 in penalty every year due to incorrect filings, according to a recent report. All these issues can be easily fixed with outsourced payroll.
- Payroll Service – Other Factors To Consider
Another important question most prospective buyers of payroll service ask is “How much you can afford to pay?”. The answer depends on many factors including the type and size of the business. For small businesses, there are many payroll service packages that these providers offer, starting from $50 and depending on business needs and budget. The length of doing business should also play a part in determining the choice. Some payroll service providers have a strong track record of serving businesses of various sizes; others are new to the industry. Consider choosing one that has the potential to accommodate your type of business. Select one that has the resources to keep up with the changing rules and regulations around taxes, healthcare and employment in general.
