5 Reasons to Consider Outsourcing Payroll Processing

From cost savings to improved security and HR integration options, outsourcing payroll processing can help your business focus on its core business tasks while enjoying increased financial and legal peace of mind. When you work with a qualified payroll provider, your employee payments, tax reporting, and compliance considerations are all handled by experts who help you leverage mobile, cloud-based software to provide convenient, real-time payroll processing for your business and employees.

5 Reasons to Consider Outsourcing Payroll Processing

In this article, we’ll explore the five reasons why you should consider outsourcing payroll processing to a qualified payroll provider. 

Reduce Costs and Time Spent

When your business handles payroll processing in-house, it requires a regular investment in payroll software, employee training, computer equipment, and a range of office supplies if any aspect of your payroll is still processed using a paper-based approach. Along the way, your employees must stay attuned to any legislative or regulatory changes that could impact your business. Without expertise in compliance, it’s possible to miss a policy change that could lead to subsequent penalties, liabilities, or audits. These issues are even more likely to arise if you have employees with different employee classifications, employees or locations in multiple states, or a mixture of salaried and hourly employees.

The biggest cost of in-house payroll processing – outside of material expenses, training, etc. – is employee time spent on payroll data entry, tax processing/reporting, and correcting payroll errors. Without an automated, cloud-based platform, a great deal of payroll and HR data entry becomes redundant, while deductions, direct deposits, tax reporting, and other facets of the payroll process become a source of stress rather than a strength of your business. As we explore in our related article, timely and accurate payroll can not only save your business money, but improve employee satisfaction through reliable payments and convenient mobile access.

Focus on Central Business Tasks + HCM Integration

Although payroll is essential to ensure accurate tax reporting, timely payments to employees, and freedom from compliance issues, many businesses choose to outsource payroll simply to increase focus on central, revenue-creating business tasks. Outsourcing payroll processing means delegating payroll to subject matter experts who can keep your business protected from liability and streamlined with payments, deductions, 401(k) contributions, and much more.

A qualified payroll provider can also provide detailed and organized payroll reports that help you assess and gain insights about business operations. Meanwhile, if you’re interested in integrating your payroll process with other HCM processes like hiring, benefits administration, time & labor management, and more, a payroll provider can help you synchronize those processes.

Access Expertise, Leading-Edge Security and Technology

When your business outsources payroll processing, it alleviates stress and time spent on complex or challenging payroll tasks that are best left to payroll experts, who have years of experience navigating the nuances of payroll, including tax considerations, regulatory shifts, and compliance protocols based on location, industry, business size, and business type.

Using an in-house process, your payroll can be unintentionally disrupted at any time by personnel changes, high-priority projects, or delayed tech upgrades. With a professional provider, you gain access to a dedicated team of experts who focus exclusively on providing the consistent and accurate payroll service your business needs.

It can be challenging for small businesses to stay up to date with the latest software, security, and encryption tools that make payroll easier to process, integrate with other HR systems, and protect from security breaches. In-house payroll processing can expose your business to security threats, including embezzlement, identity theft, or even altered company or employee records. With the use of multiple servers, backup locations, and advanced encryption tools, a professional payroll provider offers “gold standard” safeguards for your business and all of its data.

Boost Employee Satisfaction and Engagement

Optimized payroll can majorly improve employee satisfaction, engagement, company reputation and even hiring processes. Simply by implementing thoughtful payroll policy, delivering payments on time, offering mobile/self-service access, and providing direct deposit or paycard options, businesses demonstrate their investment in supporting employees and emphasizing convenience. Upgrades to payroll can strengthen company culture by ensuring that key financial and tax processing tasks are handled professionally, quickly, and free of errors.

Secure Long-Term Compliance

Staying informed about regulatory changes at the local, state, and federal levels can be a demanding and time-consuming task. It’s even more challenging to implement regulatory changes into company policy in a seamless and practical way. Many factors play into compliance, including the size of your business, location of offices and employees, industry, employee categorizations, benefits policies, pay frequency, and more. Whether it’s failure to keep a payroll record, misassigning a worker classification, paying an employee late, or missing a tax deadline, the subsequent costs, penalties and liabilities pose a significant threat to your business.

Fortunately, outsourcing payroll to a qualified payroll provider provides lasting peace of mind to businesses concerned about compliance. Providers employ consultants who are experts in the laws and regulations that apply to your business and work attentively to prevent any issues with noncompliance or legal disputes.

Enjoy Streamlined Payroll with Workforce PayHub

Managing payroll in-house can be overwhelming without professional guidance and intuitive tools to automate and expedite the process. That’s why we offer comprehensive HCM solutions that streamline payroll processing and support your greatest asset: your workforce. Our payroll platform can be easily integrated with benefits administration, time & labor management, HCM, and more. With mobile, cloud-based software and an employee self-service portal that improves accessibility and accuracy for your business, we can help you upgrade your payroll process and focus on your core business goals. Contact us today to let us know how we can support your business.

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Eric Jones
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