For many businesses, payroll outsourcing service is a better alternative to in-house computation of employee compensation, deduction, withholding taxes and benefits. When you factor in the time involved in in-house payroll processing, outsourcing is not only more cost effective but efficient. In-house payroll processing is also more prone to mistakes and non-compliance with state and local regulations.
Payroll processing is a business process that is time consuming and prone to errors. It is critical for employees to be paid correctly and on time otherwise it can become an emotional issue that can affect productivity and motivation. There is no room for mistakes in the processing of payroll but if you are still using a spreadsheet, mistakes cannot be avoided.
For a small business, payroll processing is a labour-intensive task because data has to be gathered and then calculated. There are also many regulations to comply with and reporting rules that a business has to understand. The solution to cut down on the time consumed in payroll processing is to outsource the task to the right accountancy partner.
Outsourcing helps a business avoid employment contracts and the payment of employee benefits. By choosing the right accounting partner, the business is assured of compliance with all federal, state and locals regulations regarding compensation, withholding taxes, deductions, etc.
However, outsourcing also has its share of downsides. Outsourcing is not the solution for all businesses. Accounting firms are expensive and some businesses want to have full control over employee information. Many business owners do not like the idea of payroll being processed outside the company premises.
Businesses that still prefer in-house payroll processing have the option of payroll software for efficiency and convenience. Large businesses can afford outsourcing services but small businesses with a goal of serious growth can opt for scalable cloud based service for their payroll system.
Meanwhile, a business that uses payroll outsourcing service has the peace that there will be no payroll mistakes that can affect the bottom line. In addition, some payroll outsourcing providers offer additional services like automatic check signatures, direct deposit of employee checks or envelope stuffing of paychecks issued on weekly, semi-monthly or monthly basis.