What Are the Advantages of Outsourcing a Payroll Service?
The time has come, your business has grown, and you now need to offload some of the day-to-day tasks onto someone else. But the problem is that you don’t have the need for a full-time member of staff, and even if you did, you don’t have space in your office for them.
This is a common issue experienced by businesses all across the US, especially among young or rapidly growing organizations.
The solution presents itself via outsourcing. Once a rarity in the business world, it has now firmly established itself as a common practice thanks to the numerous advantages it offers.
Here’s what you need to know.
What is Payroll Outsourcing?
Payroll is a function that requires a lot of accuracy, timeliness, and compliance with various laws and regulations. It’s easy when you only have one or two employees, but when you start taking on more staff, the role suddenly becomes more complex and time-consuming.
Outsourcing is offloading the entire payroll function for an external party to perform. This can be an individual or a larger outsourcing firm. Essentially, they take on the role of your payroll administrator and perform – on a remote basis – all the tasks that would ordinarily be performed in-house.
This includes calculating and paying wages, salaries, bonuses, commissions, and other forms of compensation to employees as well as withholding and remitting taxes, deductions, and contributions to the government.
Outsourcing Saves You Money
Hiring an employee costs far more than simply paying them a salary. They also need equipment, a desk, employee benefits, and more. All of this adds up to a considerable amount.
Outsourcing, on the other hand, is far more cost-effective for businesses because they only pay for the services they need rather than maintaining a full-time payroll staff or investing in expensive payroll systems.Â
Furthermore, because you’re not employing them directly, you’re not responsible for funding any employee benefits, PTO, or sick leave. In fact, if your outsourced payroll expert is on vacation, a replacement is typically provided, meaning the workload doesn’t suffer.
And one big hidden cost-saving benefit of outsourcing payroll is that it helps you avoid penalties and interest charges for late or inaccurate tax payments or filings. Your payroll expert will know exactly what is required and when thus making it highly unlikely you’ll encounter a financial penalty.
Outsourcing Saves You Time
Running a business takes up an immense amount of time. And as a business owner, you have to wear many hats to try and keep things ticking along.
Wouldn’t it be great if you could remove one of these hats and free up more time to concentrate on growing your business?
Outsourcing lets you do exactly that. They take care of all the time-consuming payroll tasks and admin while you focus on your core activities, such as product development, customer service, and sales.Â
Additionally, your payroll expert will be far more efficient than an inexperienced individual and will perform all necessary tasks in far less time than you would. This leads to the previous advantage – less time taken means you save more money.
Outsourcing Gives You Access to Experts
If you didn’t train as a payroll professional, then you’re not a payroll expert, and it can, therefore, be very difficult to spot problems and solve them. For example, a payroll professional will very quickly be able to determine if you are compliant with current laws because they’ll know them inside out.
They will also be able to determine if everything is in the correct tax bracket and identify where you might be able to make some savings. And they can advise on the latest tax laws, wage laws, employee benefits, garnishments, deductions, and contributions information.
Outsourcing Makes You Compliant
The last thing you want for your business is a hefty fine or penalty. It’s also inconvenient and stressful to have to endure an audit from the IRS.Â
Your payroll expert will ensure that all the necessary payroll taxes and reports are accurate and timely. They also possess the experience and expertise to comply with various federal, state, and local tax laws and regulations, as well as filing deadlines and requirements.Â
Additionally, they are perfectly able to handle any inquiries, notices, or disputes that may arise from the IRS or other agencies.
In other words, they will ensure your business stays on track and on the right side of the law. And if you do find yourself the subject of an audit, you’ll be squeaky clean.
Outsourcing Lets You Prioritize Your Core Business
Outsourcing payroll can help you align your resources and strategies with your core competencies and goals rather than spending time and money on non-core functions.Â
With outsourced payroll at their side, businesses can leverage the skills and expertise of a professional payroll service provider, who can handle the payroll functions more efficiently and effectively than the business itself. This can allow business owners like you to focus on their core business activities, such as developing new products or services, expanding into new markets, or increasing customer satisfaction.
Ultimately, outsourcing will help you grow and nurture your business, which can only be a good thing.
Where to Find Outsourced Payroll Experts
As outsourcing becomes more commonplace, it has never been easier to find yourself a payroll expert. However, the more services that become available, the harder it is to find a credible agency or individual.
We always recommend using an established and reputable firm such as ourselves. Finvisor has been supporting small businesses and startups for the best part of a decade, and we have become a trusted authority in the outsourcing realm.
We offer full payroll services along with other vital business functions such as accounting, management consulting, and more. Best of all, we only charge you for the services and work that you require, so we’re economical too.
To understand more about Finvisor, we welcome you to get in touch and have a chat with a member of our team. We’re waiting to make your business better.
To learn more about what we do, or to request a quote, contact us at hello@finvisor.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.*
- Last Modified
- April 24, 2024
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