Should You Outsource Payroll to a Payroll Service Provider?
Should you outsource payroll and related functions? This is a question many business managers consider every day. You may think of outsourcing as an additional expense, but businesses like yours find outsourcing payroll to a professional can:
- Be done for significantly less than it costs to do it in-house,
- Increase the productivity of your administrative staff,
- Provide management with better business and labor management tools,
- Improve employer/employer relations,
- Improve cash-flow,
- Significantly improve your ability to maintain regulatory compliance.
Numerous studies have determined that purchasing, operating and maintaining in-house payroll and HR systems, and associated IT infrastructure, cost significantly more than originally estimated. Outsourcing to the right provider like Time & Pay can produce very good returns on investment. More and more business managers are critically reviewing their operations, looking for more efficient ways to focus on, and proactively manage, their core business while considering cost effective options for the non-core but essential aspects of their business.
10 Important Questions to Ask Yourself.
The answers to the questions below will help you determine if outsourcing payroll is something you should consider. Processing payroll is no longer just printing paychecks! To identify opportunities that support outsourcing by eliminating the inefficiencies of your operations, consider the following:
- Is your payroll system producing the kind of information management needs to run your business as efficiently as possible and maintain compliance?
- Are your current payroll systems and staff effectively helping you control labor costs, administrative costs, compliance costs, benefit costs, and turn-over costs?
- Are your current systems providing your HR manager with the information needed to manage this valuable, liability fraught aspect of your business?
- If you internally maintain the high cost of the necessary expertise, is this the best, most efficient use of your operating capital?
- Is your technology and personnel infrastructure adequate to provide for back up and redundancy of important, recurring functions (like processing payroll)?
- Are there skills your business needs internally for competency and compliance issues but do not have because of the affordability of that expertise?
- Is maintaining the confidentiality of your employee, management or company payroll and HR information a concern?
- Are there processes in your operations that could be performed more efficiently than your current methods?
- Are there any routine, labor-intensive tasks being performed by your staff that take valuable time away from your core, mission-critical, income generating functions?
- Are the costs of maintaining your payroll and HR software and IT infrastructure exceeding your expectations.
If you answered “NO” to questions 1 – 5, or “YES” to questions 6 – 10, you will find that it will be well worth your time to learn more about the benefits of outsourced payroll solutions.
What About the Costs?
Still wonder about the costs associated with outsourcing? With all the better management tools a good provider such as Time & Pay offers, the investment associated with outsourcing will provide a great return.
Consider your current actual cost per transaction for processing your payroll. Take into account all the costs associated with producing payroll in-house, all the people and work involved in timekeeping and payroll including:
- Collecting hours worked information,
- Calculating hours worked,
- Processing the paychecks,
- Complying with Garnishments
- Dealing with employee benefits
- Working with employee questions and issues,
- Researching compliance,
- Correcting errors,
- Paying the taxes,
- Filling out and filing the government tax reports,
- Processing W-2’s,
- Responding to HR management questions,
- Maintaining your current software and systems,
- Providing the necessary office supplies to do all of the above, and so on…..
How much is it really costing you to process your own payroll? Is it really less than an outsourced solution? Probably not. If you have already outsourced but found that it was not quite what you thought it would be, you need to ask yourself if you worked with the right firm. Good, professional, payroll firms like Time & Pay will offer you a group of services that are all related to payroll and employee management and when combined, offer you greater tools for managing your business while saving you money and time. Review our web site. Just look at all we offer!