Clever RX
3 min read

Benefits of Outsourcing Payroll

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Managing payroll along with the necessary needs of a company can become overwhelming for any business owner, small or large. Handling payroll in-house involves keeping up with intricate details such as onboarding information, time and attendance, benefit deductions, garnishments, and more! Let’s not forget staying in compliance with Local, State, and Federal laws or regulations as changes are made. 

Having an effective human capital management solution is one of the essential aspects of a successful business. A company that makes too many payroll errors may have trouble keeping good employees, resulting in a high amount of turnover and overall inefficiency.

What are the advantages of outsourcing payroll? Here are the top five advantages.

  1. Save time

The demands of payroll processing can take up an excessive amount of time and money. Reduce the amount of time spent on processing payroll by allowing a third-party to handle this important part of your company. Hours of entering data and double-checking to ensure the information is correct can become a thing of the past. In addition, to payroll it’s also the employers responsibility to ensure federal and state taxes are being deducted and employees receive their tax forms (W-2, 1099 etc.). Focus your time on the growth of your business instead of payroll issues.  

  1. Compliance with laws

Staying compliant can be difficult if you do not fully understand your state and federal laws. As a business owner, you are not expected to be an expert in government tax regulations. Businesses must comply with a wide range of laws when it comes to employees. Not being fully compliant with laws can lead to costly penalties. Instead of spending time and energy on figuring out if your business is compliant with all laws, focus on core business goals. With a reputable outsourced payroll provider, you can leave this matter to the experts. 

  1. Minimize mistakes

Outsourcing payroll can minimize payroll mistakes. Having too many payroll errors resulting in penalties would be bad for any company. Errors can also ruin employee satisfaction and brand identity. Automating your payroll process is the best way to avoid paying employees incorrectly. Along with paying employees incorrectly, other common payroll mistakes are improperly classifying exempt workers, paying the wrong tax rates, and miscalculating overtime wages. With so many complicated tasks and the potential areas for mistakes, processing payroll on your own or in-house can cost you more in the long run.

  1. Payroll experts

As stated previously, owners are not expected to be experts in the complex world of government tax regulations. Why not let the professionals handle it to guarantee your business is following the laws? Payroll professionals are experts in their field, and they are required to stay updated with all federal and state regulations. An in-house employee can easily miss changes or updates. Many payroll companies also have qualified experts for different HR and payroll areas like tax specialists, payroll specialists, and benefits specialists, to name a few.

  1. Streamline and integrate payroll

Integrate your payroll with onboarding, time, and benefits.

  • Onboard & Develop: Direct new hires to your integrated onboarding platform where they can sign off on important forms including W-4s, I-9s, and employees handbooks.
  • Time and Expense: Track employees' time in the same place that generates payroll—no more double entry.
  • Benefit Enrollment: Employees' benefit plans and deductions are reflected in payroll and can be easily accessed.

Many businesses doing in-house payroll need several different systems to comply with the law. Outsourcing to a payroll company will equip you with a robust HCM platform that allows you to streamline multiple aspects of your company, making life easier for you and your employees.

While many businesses manage their payroll internally through manual bookkeeping, other businesses enjoy the full HCM experience at a low cost. The complexities of payroll processing require a significant amount of time. Businesses generally grow at a higher rate when the owner and the employees are focused on the business’s core goals. Also, you don’t have to worry about losing an in-house payroll employee and starting over with someone new. The complexity and compliance involved in payroll can cost your company lots of time and money for not complying with the law. Streamline your payroll and make life easier for you and your employees.

Contact us to learn more about our HCM services.