Payroll outsourcing is one effective solution to help your accounting management be more efficient and productive.
Your employees serve as one of the main resources of your organization. Without your trusted employees, your daily operations will not be fully functional. Thus, it is essential that they be properly compensated consistently, and without delays. This is possible through maintaining an accurate and timely payroll processing and management.
But as your business grows, so as your entire workforce and task management. A lot of organizations these days are embracing the services of outsourced payroll providers. Payroll outsourcing is one effective solution to help your accounting management be more efficient and productive.
How do outsourcing to payroll providers work?
Payroll outsourcing is when you hire a third party to take over your payroll related functions. Your payroll outsourcing provider will usually have a series of steps when processing your employees payroll:
- First, your outsourcing provider will have to set up a payroll software with your company. This will include your payroll bank account and your employees bank accounts’ where their salaries will be deposited.
- Acquire your employees total hours of work for each pay period to be recorded into their payroll software and calculate their gross pay.
- Payroll processing will include pre tax deductions such as benefits and tax, and also post tax deductions like child support.
- Make salary deposits to your employees accounts or have their paychecks delivered to their homes or the office.
- Make payments on your behalf to other vendors like your insurance company, payroll taxes, including quarterly state and federal taxes.
- Create reports for the management.
Other outsourcing companies also have other service offerings like processing your new hires onboarding paperworks, employee tax documents, and other required documents.
5 reasons to hire outsourced payroll providers
Outsourcing your payroll management saves you a lot of time and resources. Outsourcing companies have accounting professionals that will help you manage this complicated and time consuming process.
In addition to these, outsourcing this part of your business offers you the following benefits:
Human Resource Information System (HRIS)
Human Resource Information System (HRIS) is what every business needs. This will help you cut down major costs on doing manual human resources tasks daily. It will also help you to easily provide your employees with specific records like their payroll reports, benefits, training records, and more.
Access to advanced technologies
Outsourcing companies are always updated with the latest payroll software. Outsourcing your payroll saves you added costs on having to purchase, maintain and upgrade your own payroll software.
They are also always up to date with the latest tax tables to avoid having their clients pay for penalties.
Mitigate risks and avoid penalties
Payroll errors and omission or late payroll tax filings will result in penalties, and they are very costly. On top of that, government rules and regulations are constantly changing so it is a must for you to be always on top of these changes.
Payroll outsourcing providers like OP360 have accounting professionals that adhere to the ever changing government regulations.
Enhanced security
Fund embezzlement, identity theft, and tampering with company files are just a few of the risks in handling payroll management.
Most of the time, these unlikely situations happen with in-house employees. Outsourcing vendors on the other hand, incorporates strict security measures in their software that alerts their clients in different types of payroll fraud.
Accounting experts
By outsourcing you have the advantage of working with accounting experts. This is especially with startups and small businesses as you are able to acquire the same expertise that usually are only available to bigger companies.
Payroll outsourcing services fee will usually vary depending on your type of requirements.
