Here are five proven benefits of hiring a payroll management company and outsourcing your payroll and payroll tax requirements:
1. A payroll management company can help you get (and stay) organized.
Proper payroll organization begins with effective systems and processes for managing tasks, responsibilities, and deadlines. This can include software tools for managing various types of information, detailed filing systems—electronic and physical, avoiding clutter, and disposing of out-of-date items. Fulfilling the payroll requirements for Paycheck Protection Program loans also requires a great deal of organization and additional documentation.
For these reasons, handling payroll in-house can be more expensive than outsourcing. A payroll management company has the experience and tools you need to organize all your payroll requirements from the very beginning.
2. A payroll management company can help you define and document your processes.
Having a solid awareness of your payroll process is critical. A clear documentation of your process is also important in case there are any questions or concerns from employees or stakeholders.
With the shift to remote work due to the pandemic, developing flexible payroll processes is more important than ever. When things change or something goes wrong, having a good system will keep things from falling apart. Documenting your process is also helpful in the event of an audit.
But, where do you start? And, what should you include? A payroll management company helps eliminate any guesswork of developing an effective payroll process that works for your business.
3. A payroll management company helps you establish discipline, manage expectations, and maintain accountability.
While every company dreams of error-free and effective payroll management, that’s often easier said than done. A payroll management company can help you carefully manage expectations about how payroll works. Once payroll rules and guidelines are in place and properly communicated, it’s important for employers to make sure management and staff are accountable to the process.
Using a payroll management service limits the business’s legal liability. It’s up to the payroll management company to ensure that all labor and tax laws are followed correctly. A business that fails to process payroll correctly can find itself on the hook for big penalties from the IRS.
4. A payroll management company pays attention to the details.
With payroll, the smallest details can make the biggest difference. Failing to pay close attention to every detail can greatly impact your staff and payroll management. Because a payroll management company knows the ins-and-outs of every aspect of the job, they can help you minimize liability and maximize your payroll process to support business growth.
From proper classification of employees to tax regulations and exceptions to knowing and understanding labor laws, outsourcing your payroll ensures you don’t miss important details that keep you in compliance and penalty-free.
This is especially important as more work shifts to remote and employees start to take advantage of new laws for paid family leave and sick days. For a harried HR department, it can be difficult to keep the small details in-laws in different states straight, but a payroll management company has whole teams dedicated to the details.
5. A payroll management company adapts with you as your business grows or as laws change.
No two businesses are the same, and payroll is not a one-size-fits-all endeavor. If you’re wondering how to choose a payroll service provider, find one that understands your organizational goals, company culture, and best industry practices when deciding how best to approach and manage payroll. The right choices can positively influence whether payroll is completed on time and with accuracy, efficiency, and effectiveness.