Should You Outsource Your Payroll to a Payroll Service Provider?
Should you outsource your payroll services and related functions? This is a question many business managers consider every day. Even though you may think of outsourcing as an additional expense, businesses like yours find outsourcing payroll to the right provider can:
- Be done for significantly less than it costs to do it in-house,
- Increase the productivity of the administrative staff,
- Provide management with better labor management tools.
- Significantly enhance your ability to maintain compliance.
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 that business. Numerous studies have also determined that purchasing, operating and maintaining payroll and HR systems, and associated IT infrastructure, cost significantly more than originally estimated.
10 Important Questions to Ask Yourself.
Processing payroll is no longer just printing paychecks! To identify opportunities that may substantiate outsourcing by improving 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 and cost effectively 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.
The answers to the above questions will help you determine if outsourcing payroll services is something you should consider. If you answered “NO” to questions 1 – 5 or “YES” to questions 6 – 10, you should realize that it will be well worth your time to learn more about the benefits of outsourced 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 will offer, the cost associated with outsourcing will provide a great return.
Consider your current actual cost per transaction for processing your payroll. In other words, taking into account all the costs associated with producing payroll in-house, all the labor 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,
- 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 for 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 option? 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. By reviewing our web site, just look at all we offer!