If you are like most entrepreneurs, when you first started your business, handling your own payroll management was a fairly simple task. You kept a ledger, paid yourself and maybe just a few employees. The payroll process didn't eat up your valuable time so you could spend that time growing your business.
Once the time spent growing your business has paid off you may find that not only have your sales increased, your staff has also increased to meet the demands of your growing business. And the once-simple payroll management process has ballooned and - along with it - your time spent on it has also increased.
There comes a point where the benefits of handling your own payroll start to diminish.
"The Law of Diminishing Returns" states, "there is a level where profits and benefits gained is less than the amount of money or energy invested." There comes a point where you can spread you and your support personnel too thin and your business growth starts to plateau.
Of course, you can hire more people to handle your payroll, but in this day in age of employee turnover, investing in training, and added expenses of hiring an employee that you are not sure is a fit for your company, this may not be the best use of your money and resources.
There are a number of good reasons to consider outsourcing your payroll to a professional payroll management services company. While you may want to retain some of your general accounting operations such as accounts payable and managing your receivables, payroll is a great candidate for outsourcing.
Although it is understandable to think that it is still more cost-effective to keep all of your payroll functions in-house, the truth is that many companies large and small find that the cost-savings can be substantial. In addition, there are other benefits that are not easily measured in dollars and cents, but that are just as viable and valuable.
HR managers are becoming increasingly overwhelmed with added responsibilities, growing regulatory obligations, and a continually changing HR landscape. Managing the complex interactions between departments and the relentless demands of federal, state and local agencies can take its toll.
So being able to safely and cost-effectively delegate one of the more onerous processes to an outside vendor can be a smart move on a number of levels.
A more comprehensive list would probably mention such things as enhanced security and improved compliance. And, no doubt, this can be a much longer list, but regardless of who asks the question, these three advantages are always cited as the major benefits:
Outsourcing any function in your business should be a strategic and operational decision, one based on more than simply hoping to save money. And while saving money is indeed a major incentive, there are other indicators that can help you know when it's time to move your payroll processing to an outside firm:
At a certain point it becomes increasingly apparent that delegating your payroll accounting process to a vendor such as Accuchex is the better move strategically.
Once you reach a certain volume of employees, spending your time on the complexities of payroll management is no longer worthwhile. In fact, you put your company at risk if you are not up to date on employment law.
Most business owners do not have the time to go to classes and stay abreast of ever changing laws when it comes to employee payroll. As your company grows, you do not give it a second thought when it comes to investing in equipment or technology to better manage the business.
Therefore, it only makes sense to use your time to grow your business while using the expertise of payroll professionals to manage your payroll.
When considering a payroll management company, make sure you find a company that becomes a partner in your success. For a complimentary consultation to discuss the pros and cons of payroll outsourcing, please contact Accuchex at (415) 883-7733.