There comes the point where a small organization grows and takes on employees, and this is when the need for a payroll administrator comes into play.
However, this is a time-consuming job, and you want to get it right; otherwise, you’re going to have a lot of disgruntled employees on your hands.
Outsourced payroll is a service that many businesses find invaluable for saving them time and resources. Rather than hire someone in-house, an organization will hire a third-party company or individual to handle all payroll-related functions, including dealing with wages and salaries, tax deductions, and employee paychecks.
But how precisely does this important function work? And more importantly, is it time to find outsourced payroll for your business?
The process of outsourced payroll begins with the business owner or HR department deciding they need someone to take control of the payroll function. There are three options for this:
Training existing employees is problematic because it takes a long time and requires investing in someone who could leave the company, landing you at square one again.
Hiring a full-time employee is a good solution, but the hiring process can take a long time. Additionally, many organizations don’t have the requirement for a full or part-time employee.
Outsourcing, on the other hand, gives you access to a payroll expert almost immediately and without the need to hire someone in-house.
Once you have selected who you want, you will agree on a level of service with them. For example, if you need a payroll expert two days a week, then this will be the service requirement.
Many financial outsourcing companies have tiered subscription-based plans to choose from that provide different levels of service. It’s your job to determine which is best for you.
Once your payroll expert is on board, they will work with you to set up the payroll system.
This typically involves collecting information from the business, such as employee data and payroll schedules. This information is then input into the payroll expert’s payroll software, which is then used to process everything.
Your payroll superstar is generally expected to carry out the following duties:
Most outsourced payroll is organized on a rolling contract basis. This can be annually or monthly, and you will be required to pay a fixed amount in relation to the agreement. In most cases, payments are made monthly but can sometimes be annually.
Since your payroll expert is outsourced, there are several items that you are not responsible for paying. This includes:
If you have employed a freelance payroll expert, then they are considered self-employed and therefore responsible for all of the above. If you have used an outsourcing company, then it is the company that provides the above for the individual.
The benefits of outsourced payroll cover four key categories:
This may sound counterintuitive. After all, how can paying for something also save you money?
Well, the average salary of a payroll expert sits at just over $100,000. That’s a lot of money for the average business, never mind factoring in PTO and other benefit payments. And what happens if you’re a small organization and don’t actually need a full-time payroll expert?
By outsourcing, businesses can avoid the expense of paying a full-time salary and any benefits and, best of all, only pay for the level of service required.
Payroll is a complex process that requires meticulous attention to detail. Errors in payroll are unfortunately all too common and can result in underpayment, overpayment, or incorrect tax filings. Remember those disgruntled employees?
Outsourcing payroll gives you access to a qualified expert who knows exactly what they’re doing. They’ll handle everything accurately and vastly reduce the risk of errors.
Payroll is time-consuming, especially if you’re unsure what you’re doing. An outsourced expert will not only take the job off your hands entirely, but they will also handle everything in the most efficient manner.
Payroll providers are experts in their field and are knowledgeable about the latest payroll laws and regulations.
With an expert to hand, you’ll stay on the right side of the law, in compliance with all payroll laws, and maybe discover a nice tax break.
Cost is a significant factor to consider when choosing a payroll provider. Different providers offer different pricing models, so it is essential to consider the overall cost of the service, including any additional fees or charges. Essentially, you only want to pay for what you actually need.
Security and privacy are also critical considerations. Payroll providers handle sensitive employee information, such as Social Security numbers and bank account information. So, it is vital to ensure that the provider has robust security protection measures in place and that they are compliant with all data protection regulations.
Finally, their communication and support styles are important factors to consider. Payroll is a central function of any business, and it is essential to choose a payroll expert that offers reliable and responsive customer support.
When considering outsourcing payroll, take the time to research providers carefully. Consider factors such as reputation, services offered, cost, security and privacy, and customer support.
For example, at Finvisor, we take our client’s business very seriously, and we only provide high-qualified and experienced individuals to handle the payroll function. We use secure cloud-based payroll software and ensure we’re always meeting all regulations and compliance measures. No exceptions.
By choosing a provider that meets your business’s needs, you can ensure that your payroll is handled accurately and efficiently, leaving you free to focus on other essential business functions.
If you’re keen to see how Finvisor can take care of your payroll at an affordable price. Get in touch today.
To learn more about what we do, or to request a quote, contact us at email@example.com or 415-416-6682. We’re here to help you navigate deferred revenue journal entries so you can make the most of your assets!
*This blog does not constitute solicitation or provision of legal advice and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.*