If you’re just starting out in business, you might not have realized the role HR and payroll specialists have to play in your daily operations – especially for your team’s monthly salary.
This is doubly challenging to the department as your business grows, having to search for, hire, and manage more employees as time goes on. With 25% of small businesses still managing their finances and accounting manually, this takes longer and is prone to human error. Moreover, they work on several operations and strategies at a time alongside leadership to support people, culture, and business growth.
If you’ve been thinking of outsourcing payroll, learn more about what it is and how it can serve your company as it develops.
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What is Payroll Outsourcing?
Payroll outsourcing is hiring a third-party service provider to manage accounting for your staff’s salary and benefits. It’s an option available to small and large businesses, particularly when they’ve experienced challenges in managing it on their own.
Generally, your focus in starting a business is the solutions you want to offer your customers. You might have even started out as a self-employed entrepreneur. Managing a team and their salary would have been the least of your worries, so it’s understandable that you wouldn’t be familiar with how to do payroll.
With this, you’re certainly not expected to become an overnight expert on the payroll management system. Over time, you can build up a team dedicated to your HR and finance operations, or partner with a reliable payroll outsourcing agency. For companies considering international growth or a global expansion, there are also employer of record services you can work with to assist your business.
The Benefits of Outsourcing Payroll
As mentioned above, with a quarter of small businesses manually doing their books, they are inevitably susceptible to human error.
On the other side of the coin, 45% of small businesses outsource their payroll processes. This shows that a good number of organizations have seen and experienced the advantages of outsourcing their salary operations. Even large corporations can benefit from third-party payroll services as this can help decrease their overhead costs.
Why should you outsource payroll processes?
Benefit #1: Outsourcing Payroll Saves Time
It takes a lot of moving parts to support a business as it grows. It’s impressive when leaders and managers have the proper delegation skills to keep track of different teams and projects at a time, it isn’t feasible for everyone.
Partnering with a payroll service provider takes some of the weight off your shoulders. It saves you time and effort formulating plans of action to improve operations, mostly because HR agencies would have established process and productivity tools for a more straightforward approach.
This is also where automation applications come in. While these also need setting up at first, once you’ve arranged all the necessary settings and cataloged the essential details, it’s smoother sailing than doing it manually.
Benefit #2: Comprehensive Payroll Services
The best payroll services have a comprehensive list of features and tools. This usually comprises timesheets, attendance, leave filing, recordkeeping, salary and tax computation, and employee management all in one platform.
The best feature of all is the convenience of being able to use the platform from any device. Once it’s time to claim a payout, employees can select their preferred method.
This can also save you time since you won’t have to switch between multiple applications to do one task. Of course, working with a payroll service provider means not having to do it yourself at all.
Benefit #3: Payroll Outsourcing is Safe and Secure
While setting tools up and implementing their use can take time, automating tasks decrease the chances for mistakes down the road. Moreover, any reliable application should have established security measures and privacy policies for its users.
That said, it’s vital to select the provider with the most ideal protection features for your team’s information. This is also encouraging for your staff because they can freely use and access the payroll system as much as they need and they’ll have a secure transaction each time.
Benefit #4: Affordable Pricing for Payroll Outsourcing
With all these functions available in payroll outsourcing platforms, being affordable is a considerable advantage over searching for, hiring, training, and establishing processes internally. Of course, being able to accomplish all these within your company is a notable accomplishment, lowering costs is also a priority for your business.
Find the ideal payroll outsourcing tool to match your needs with all the features you require within the budget you’ve allotted.
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Things to Consider When You Outsource Payroll
So, what are the things you should look out for when browsing for the appropriate payroll service provider? Below are some points to keep in mind on how to choose a provider:
Similar to when hiring a new team member, determine if the potential payroll outsourcing meets your requirements, and vice versa.
Consider how your team is set up: If you’re an international company, outsource payroll to a service that covers a global scale rather than a limited number of countries.
Find feedback from their previous clients and review their track record. These can also confirm if the platform has the features you’re looking for.
See if there’s a free trial period for the platform and evaluate how well the team interacts with it in the time available. If it’s amenable to the overall work process, consider permanently integrating it into your routine.
How Does Payroll Outsourcing Work?
Let’s discuss the business side of things: How do you integrate an outsourced payroll service into your company workflow? What basic functions is the average payroll platform capable of? What features should you look out for in your search for the right fit?
Learn more about how payroll outsourcing works to discover how you can shift your processes to include it. Payroll service providers typically offer the following tools on their platform:
Feature #1: Integrated Timekeeping and Attendance
An integral part of the outsourced payroll platforms is the timekeeping feature, which is what makes automating tasks possible. Employees can also schedule their leave requests from the application, which simplifies the process of emailing specific managers and them manually checking an Excel sheet of who would be on leave.
From the main page, you would typically see a time recorder and buttons to time in or out, a calendar to see which days you’ve attended work or taken off, and how many PTOs you have left. This is a quick and easy way to see an overview of your work attendance.
Feature #2: Automated Accounting
As the main feature you’re looking to use on a payroll service, make sure that you’re comfortable with the look and feel of the platform.
Thanks to your attendance details, the outsourced platform can work as intended and automate payout, tax, and other benefits computations. This streamlines multiple tasks and saves your HR and finance department a lot of time processing each employee’s salary for the month – a benefit that both small and large businesses can enjoy.
Feature #3: Cloud-Based Access for Employees
An excellent feature for teams working from home, more so for companies with an international workforce. An online platform that can be accessed whether from the office or on-the-go makes the process faster and more seamless for everyone. Managers can access employee attendance records. Employees can update their information and access it as needed.
Feature #4: All-Inclusive Client Support
To stand out among competitors, service providers will integrate as many handy features as possible centered on automating or assisting on minor tasks.
Many platforms make your government dues and fees easier to track and manage thanks to the automated computation from payroll platforms. Receive email notifications of payment amounts and deadline reminders, so you won’t incur interest due to late payments. There are also providers who offer tax report assistance, benefits claims, and unemployment claims.
Payroll outsourcing platforms also offer 24/7 support for queries and troubleshooting concerns through voice and chat support. This means they can serve clients from different parts of the world and provide prompt assistance.
Key Takeaways to Outsourcing the Payroll Process
Outsourcing the payroll process isn’t a last resort. Though businesses can opt to partner with them following challenges in managing the HR and accounting process by themselves, keep in mind that the nature of business is to focus on your strengths. Networking and collaborating with industry experts can help you learn new approaches and techniques, similar to finding a mentor and gaining an inside look into their expertise.
To summarize, what makes partnering with a payroll outsourcing service a benefit to your company?
- Simplify complex payroll processes – Providers have integrated all the useful tools to help polish your workflow.
- Automation of most payroll tasks – The essential functions to your process can be streamlined through automation programs and incorporating timekeeping, attendance, and leave requests onto one platform.
- Partner with the payroll professionals – Learn tried and tested techniques from the experts, or better yet, establish a partnership which benefits both parties as you focus on how to develop your businesses accordingly.
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