Whether you are a small or large business, it can be hard to determine when is the best time to outsource your payroll. For small businesses, payroll may seem like an additional, unnecessary expense and for larger businesses and corporations, having an in-house payroll team may seem like a more effective option. In reality, outsourcing your payroll can be much more beneficial.
So, what are the benefits of outsourcing your payroll?
Hiring a third-party to manage your payroll may seem like an expense your company can avoid by hiring another accountant. However, when you consider the wage, job benefits and HR involved with hiring another employee, outsourcing to a third-party is much more cost-effective. Handling your payroll in-house will also include costs such as payslips and printing, which can be avoided by outsourcing your payroll.
If your start-up business is still in its relatively early stages of development, you may feel you are capable of handling all of your accounting and payroll needs yourself. Organising payroll may seem like a straightforward task but it can be incredibly complicated and time-consuming. Handing payroll needs yourself, therefore, takes up a significant amount of your time and prevents you from focusing on other important business tasks.
By trying to handle payroll matters yourself or asking a member of your team to organise payroll on top of their existing workload, you risk your payroll being completed incorrectly. While paying your employees the wrong amount may not seem like an EH&S (environment, health and safety) problem, you may be creating problems for your employees in relation to their tax and make them feel undervalued in their work environment.
The last thing a small or large business needs is pressure from the ATO for submitting an incorrect payroll or submitting essential tax information late. When you outsource your payroll to a quality company you can have complete confidence your business account information will be completed correctly and on time. Third-party payroll services often utilise the latest technology and software, such as SuccessFactors, to ensure they can handle human capital management with ease.
When you outsource your payroll to a reputable company, you can have complete confidence in the security of your data. Hiring a new employee to handle your payroll needs in-house is very risky, as you can’t be completely confident they have the training and expertise to handle sensitive company information and data. Outsourcing your payroll can eliminate this concern.
When is the right time to start outsourcing your payroll?
If any of the above points sound like they may benefit you or your business, it’s time to consider outsourcing your payroll. Even as a smaller company, the potential long-term time and costs savings make outsourcing your payroll a beneficial option from the early days of a company’s development. Although you are trusting a third party to supply your payroll services, outsourcing can actually provide you with more visibility and control over your payroll.