Accuchex Blog

Outsourcing vs. The Real Costs Of Payroll Management

Posted by Leslie Ruhland on Mar 7, 2017 9:00:00 AM
Accuchex Payroll Solutions
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Payroll management is the lifeblood of any business. Keeping employees properly paid and on time requires a great deal of time. And time is money.


Your payroll process is one of the most vital processes in your business. It comes with a number of compliance, accuracy, and cost concerns.

And it is costly.

While most small to mid-sized businesses in the U.S. continue to manage their payroll process in-house, the number of those that have turned to outsourcing continues to grow. This is largely due to the many reasons it can be far more cost-effective and secure for smaller companies. 

When It's Time to Outsource Your Payroll Management 

Outsourcing any function in your business is a strategic operational decision. Because of this, the decision must be based on more than simply saving money.

While saving money is certainly a valid objective, it isn't the only strategic reason to consider outsourcing. In fact, there are other indicators that signal it's time to outsource your payroll processing, such as:

  • Your staff is struggling to maintain compliance and accuracy
  • Your payroll process exceeds your software's capabilities
  • You are adding employees
  • You are adding payroll staff

There comes a point when it is increasingly apparent that delegating your payroll accounting process to an outside vendor is a strategically better move. 

The Real Costs of Your Payroll Process 

Once a business exceeds, say, 500 employees or more the cost per employee for payroll begins to equal that of outsourcing the same. However, for businesses employing less that 100 and especially under fifty, the advantages of outsourcing can be significant.

The costs associated with in-house payroll processing are high, especially wit a "manual" system using paper time cards and other paper-based tools. In-house payroll functions can be costly in ways you may not have realized.

This infographic illustrates the very real associated costs are often incurred by businesses doing their own payroll:


 The Savings of Outsourcing Your Payroll Management

Outsourcing payroll may not be the best solution for every smaller business. However, the advantages and benefits make it worth considering. Not only will you be reducing your in-house costs, increasing accuracy and security, you can benefit by shifting your limited HR resources to improving operational functions, recruiting efforts, and training.

In addition to enhanced security and improved compliance, there are significant savings benefits. In addition to everything else, these three savings advantages are often the major benefits:

Cost Savings

If you were to conduct an in-depth cost analysis, you will find that your business can realize significant savings in real dollars by outsourcing this function. In addition to the overhead costs reduction, there are savings with software costs, training and support costs, not to mention compliance related expenditures.

Management Savings

By relieving your management team of the time-consuming work of ongoing payroll functions, you can actually improve their overall productivity. With your payroll being outsourced you are releasing a substantial number of hours that your HR staff can use to engage in tasks that provide more long term benefits to the company. Minimizing the payroll processing and reporting functions from often overworked staff can help eliminate stress and employee burnout. 

Time Savings

As we noted already, time truly is money. Saving time can be seen as another side of cost savings. The average time spent processing payroll for approximately 50 people was about 18% each month, according to one survey. That's like having one full-time person process payroll for every 250 employees. And that doesn’t include managing ongoing changes in payroll, administrating benefits, compliance, and other tasks of payroll accounting. 

Finding a Reliable Payroll Management Service

As a business owner or payroll manager you have a number of options for your payroll functions. Software that can be installed in-house, or cloud-based programs offer a good alternative. But if you really want to take full advantage of the benefits available to you, outsourcing to a provider like Accuchex can still be the best decision.

Reliability, full-service options, and reputation are the hallmarks of a quality payroll management service provider. If you are currently looking to invest in outsourcing you 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 management, managed payroll services, HR best practices, payroll process, HR compliance, outsourcing payroll management

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