Accuchex Blog

5 Indications For Outsourcing Your Payroll Management

Posted by Tristan Ruhland on Sep 1, 2016 9:30:00 AM

Payroll management can become a major expense for businesses in both time and money. So what's the best solution?

It is a rare business owner or HR manager that enjoys the work of payroll management. And while it is an essential and vital component of your business operations, at some point the question arises whether it is time to outsource your payroll operations.

Payroll management is a business function that, along with taxes and other HR functions, is often outsourced. However, as a business owner or manager, it is quite common to think of "outsourcing" in terms of an "expense".

There are many reasons for considering outsourcing and perhaps the most readily apparent one is the time and labor savings. 

But from a cost-effectiveness perspective, when does it make sense to use a payroll management service? 

The question is a valid one and must be answered before a company commits to contracting with an outside vendor to manage their payroll processes.

5 Major Signs That It's Time to Outsource Your Payroll Management 


1. There are too many mistakes.  Payroll mistakes are costly. In addition, you run the risk of creating problems with employees and, possibly, government agencies.  A good payroll services provider is far less likely to make serious errors. And in the unlikely event that it happens you able to receive financial restitution from the provider. Peace of mind is one of the greatest benefits of outsourcing your payroll process.

2. It takes too much time. Professional payroll management services specialize in processing complex payroll systems. And because this is what they do best, they also accomplish this much more quickly and efficiently than your own staff is able to. Since your payroll staff probably has multiple roles to fill in your business, removing the burden of constantly processing your payroll will increase their productive time.

3. Staffing costs keep going up. While large corporations might be able to absorb the cost of fully staffed payroll departments this is not the case for smaller businesses. For example, if your business has, say, less than 20 employees, it may well be far more cost-effective to outsource your payroll operations. And when you include the cost of printing and distributing checks, creating tax documents, and related tasks associated with your payroll process, the savings can be substantial.

4. Compliance is becoming overwhelming. A good payroll services provider is up to date and knowledgeable on employee and payroll compliance. They must stay abreast of all new tax laws and regulatory mandates on the federal, state and local levels. The burden on your own staff to maintain this level of compliance knowledge only increases with each legislative session.

5. Constantly having to upgrade payroll software. Business owners are always under the gun to acquire and maintain the latest version of their payroll software and ensure that they have the most recent tax information. Outdated tax and payroll information can be a nightmare for a business requiring regular updates or upgrades. Outsourcing your payroll management process eliminates the need for these expenditures.

Benefits of Outsourcing Outweigh the Costs

If your company has been growing for a while, odds are you are probably already thinking about the need for payroll management companies.

However, knowing how to get started or where to turn can be challenging. It may seem that integrating a new payroll management approach into the overall business plan of your company is a major task. Or you may be wondering if the cost will be warranted by the results? Making a change in any business system can be challenging and, in the case of outsourcing, involve an investment.

But the end result will be a payroll system that runs smoothly, accurately, and without you doing all the work.

Outsourcing as a Fiscal Business Strategy

Rhonda Abrams, author of Hire Your First Employee says,

"One of my rules is, if you have even one employee, get a payroll service. The penalties for screwing up are so much more expensive than the cost for the payroll."

The key to keeping happy employees and the IRS off your back is implementing an effective payroll management system.  In addition, you can spend your time growing your business as opposed to handling the payroll management functions yourself.

It's time for a change

Take some time to assess the state of your own payroll management capabilities. If these signs are present and you're finding that your payroll process has become a drain on your company's time and resources, then it's time for a change!

Get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.

Free Download: Payroll Outsourcing Guide

Topics: Payroll, time and attendance, HR best practices, outsourcing payroll management, payroll compliance

Subscribe to the Accuchex Blog