of all sizes choose to outsource – or not to outsource – various functions of
their business. Common outsourced areas include secretarial services, data
services, customer support, human resource department functions,
accounting-related activities, as well as payroll processing and tax filing.
Although there are pros and cons of outsourcing any or all of these activities,
there are some very compelling reasons why any business with employees should
- Focus on revenue-generating activities.
Time is a precious commodity; and let’s face it, payroll is a very
time-consuming process. Accurate calculation of wages due, withholdings for
federal, state and local taxes, completing and filing tax forms correctly and
on time - and that is the activity involved in a simple payroll. Add to that
the complications of withholding and submitting payment for garnishments,
calculating the tip credit, employer taxes, retirement plan deductions,
contributions to a health savings plan – payroll can be a very real drain on
time when you manage it in-house. An outsourced payroll company can help you to
free up time to concentrate on revenue-generating activities instead of payroll
- Expertise. Payroll companies are true experts in the
field. They have teams of employees who
ensure that the company is up to date on federal state and your local payroll
laws. This means that your employees are paid correctly and on time each and
every pay period and you don’t need to worry that you aren’t in compliance with
all the payroll laws that affect your business and employees.
- Payroll tax filing and compliance. Payroll
tax calculation, filing and payment are complex and time-consuming tasks.
And the regulations seem to be ever-changing, making it that much more
difficult to be sure that you are within the law. Payroll companies manage these needs for
their clients every day – and do it very well. Most will provide reports for
you and some will even file and pay the taxes on your behalf. The payroll company should also resolve any payroll tax notices directly with
local, state and federal tax authorities and pay penalties, interest, fees,
etc. associated with the notice.
- No interruption
in your payroll functions. Because the
payroll company holds and maintains the expertise on your payroll, your
employees will continue to be paid accurately and on time. Processing payroll
during a natural disaster or scrambling to get your employees paid if your key
payroll person leaves the company become non-issues when your payroll is
- Direct deposit
and payroll cards. Most payroll companies offer you the ability
to provide your employees with the convenience of direct deposit, often at no
additional charge. Not only does direct deposit save your employees a trip to
the bank each pay period, it saves you the cost of check stock and printing, as
well as the headache and cost associated with replacing lost or stolen
paychecks. For employees who do not have a bank account, some payroll companies
also offer payroll
cards. With payroll cards, the employee’s pay is deposited into an account
that he or she can access with an electronic card, much like a debit card.
There is ordinarily no cost to the employer and the cost to the employee is
usually very limited, if there is any cost at all.