It’s a natural thought for a small to mid-sized business owner to have: Why bring in outside help for a task if you can handle it in-house? When it comes to payroll outsourcing, however, you might want to think again.
It’s a complicated and time-consuming process involving wages and overtime, benefit contributions, ever-changing tax labor and tax laws and regulations, and lots and lots of record keeping. That’s why many companies have opted for payroll outsourcing.
Using a payroll service provider places all of those responsibilities (and then some!) into the hands of trained professionals who understand all the complexities of payroll management and have access to the latest tools and technology to ensure your staff and taxes are paid accurately and on time. For many, outsourcing payroll administration brings peace of mind, but is it right for your organization? Let’s look at some of the pros and cons, starting with the pros:
It’s a big time-saver.
Ask any HR manager and they’ll tell you that payroll is a major time-vampire, especially when dealing with a hybrid workplace or a company with a mix or full-time, part-time and contracted workers. In a small business, the payroll administrator likely has a host of other human capital management duties that they’ll barely have time for. Using a managed payroll service frees your HR team from burdensome administrative duties and allows them to focus on other crucial areas of your organization.
It reduces errors.
In-house payroll administrators often use manual data entry methods like spreadsheets or software with limited capabilities like Excel. Both approaches can very easily lead to omissions, missed payments or late payroll tax filings. With a professional payroll company, such as Accu Data, your payroll is handled by experts using cutting-edge payroll processing technology that’s automated and fully integrated, virtually eliminating errors.
It keeps you compliant.
Currently, the U.S. Department of Labor enforces more than 180 federal laws, which are constantly being updated. That’s hard to keep up with! Add to that all the local, state and federal tax laws that apply to your business. Thankfully, a professional payroll processing service will constantly monitor new regulations and requirements closely in order to help employers maintain payroll compliance.
Many small businesses shy away from outsourcing payroll because they don’t want to tack on an additional expense to their budget. But often, in-house payroll management can be more expensive, given the amount of time and resources required to handle it. Add to that the threat of tax penalties and other fines that can come with violations prompted by errors.
So, what are the cons of outsourcing payroll? There are some caveats, though it must be stressed that many of them are misconceptions. Among the concerns of hiring a third-party payroll provider are:
- They can be pricey
- They present confidentiality threats to your staff and business
- You lose control over your company’s info and reports
- You’ll become a number to them and not a priority
Like most service providers, not all payroll companies are created equally, so it’s important to do your research to ensure to their capabilities match you company’s unique needs.
At Accu Data, we have over 35 years of experience as a leading provider of payroll, offering personalized and dedicated service and tailored packages designed to meet your specific needs and budget. Contact Accu Data today for a free consultation and to learn more about our other HCM capabilities, including time & attendance, applicant tracking, benefits administration and more.