Businesses often carry out their payroll processing without knowing what it really costs. Having payroll done in-house might seem like the most cost-effective approach, but is it?
Outsourcing is not a new idea, of course, and most business owners and managers understand the inherent value of delegating, or outsourcing, tasks. However, when it comes to something as substantial as outsourcing payroll, the question that is usually asked is, "How much is it going to cost?"
While this is a valid consideration, it is almost akin to putting the cart before the horse. The first question should be, "What will be the benefit to us if we outsource?
That question could then be followed with, "How much does it cost us now to keep payroll in-house?"
The truth is that, while involve a cost to have your payroll processing managed by a third-party service provider, outsourcing can actually be a very cost-effective option. When you consider that it will free up valuable time and resources within your organization the costs typically far outweigh the gains made in productivity, accuracy and security.
From an operational point of view, outsourcing your payroll process should be viewed as an investment, not an expense.
Outsourcing Payroll Management as a Business Practice
As a strategic decision, there are a number of good reasons to outsource your payroll to a professional payroll management services company. In fact, the payroll process is a good function to outsource, even if you choose to keep your general accounting operations like accounts payable and accounts receivables internal.
It may seem counter-intuitive to pay a third-party firm to manage your payroll, while you already have staff doing it. But the internal payroll operations are often strained and less than efficient. In fact, not only can it be less cost-effective to keep all of your payroll functions in-house, many companies find their cost-savings from outsourcing to be substantial.
And the truth is that your HR and payroll managers are likely overwhelmed with the added responsibilities, growing regulatory obligations, and continually changing payroll landscape. Because the compliance requirements are so burdensome, simply juggling the payroll, wage and hour tracking, and other interactions between departments is difficult.
Not to mention the regulatory demands of federal, state and local agencies that can easily overwhelm your business.
However, by outsourcing some or all of these functions, you'll be able to cost-effectively delegate these burdensome processes to a reliable vendor. And this can be sees as a strategic investment on a number of levels.
The Real Costs Payroll Processing
In the business world at large, the overall trend among organizations, especially small-to-medium companies (SMBs) and larger enterprises, has been towards more and more outsourcing. And outsourcing payroll process functions ranks near the top.
Some facts and trends among businesses when it comes to payroll practices are illustrated here in this infographic:
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Cost-Effective Benefits of a Payroll Service
It's possible that you've already been thinking about the need for outsourcing to a payroll management company. Your business is established and has a solid history of growth, but now certain functions are putting a strain on your resources. And, though you may have considered outsourcing before, you may not have considered it an affordable option.
And getting started or knowing where to look can be a challenge. Even if you do decide to outsource, you may be wondering if the results will justify the cost?
Outsourcing can be more cost-effective in the long-run, especially when you factor in the intangible benefits. And, having a reliable payroll management company means you also get the peace of mind from knowing that your payroll process is being managed competently, accurately, and on time.
In addition, the accountability and liability for payroll compliance rests with your service provider. This free's your payroll staff from the pressure of staying informed of and being compliant with changing regulations.
And because these are benefits you can track in actual dollar amounts, you can calculate the ROI of your outsourcing investment.
Making any kind of major change in business operations can be challenging and, in the case of outsourcing, will involve an investment. But when it comes to hiring a managed payroll service, the end result will be a payroll process that runs smoothly, accurately, and with someone else doing all the work.
A post from the CPA firm Clayton & McKervey states:
“… a company had one person performing all of the payroll processing functions... They chose to outsource the functions to reduce the risk of the payroll not being processed, to manage growth by anticipating the increased payroll responsibilities that will be required as the firm grows and hires more employees...”
A great way to keep your HR staff happy and the IRS at a distance is to outsource your payroll management process. And, by outsourcing it, you can invest the time saved in growing your business instead of handling labor-intensive and costly payroll management functions yourselves.
Partnering With a Reliable Payroll Management Service
As a business owner or payroll manager you do have many options for your payroll functions. Software that can be installed in-house or cloud-based programs offer good alternatives, for example.
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.