Payroll is arguably one of the most important HR responsibilities for an employer, especially if you were to ask the employees. But, for companies that may not have a designated payroll professional on staff, the task of payroll processing can be frustrating and time-consuming for the employer to manage. That’s one of the reasons many employers seek to utilize payroll outsourcing and processing services.
Payroll outsourcing and processing services offer several benefits to small businesses and employers. Not only can it save time and energy, but employers can rest assured that payroll outsourcing providers will keep all processes and procedures in compliance with the latest payroll laws and regulations, avoiding any potential penalties for even the smallest mistake.
Four Factors to Consider for Payroll Outsourcing & Processing Services
If you’ve been on the fence about utilizing payroll outsourcing and processing services, here are a few things to consider.
- Company Resources—Something every employer must consider when deciding between in-house payroll processing or choosing a payroll service provider is company resources. If an employer doesn’t have the proper technology, professionally-trained staff, or ability to maintain payroll records, it is probably a good sign that outsourcing payroll duties is the best way to go.
- Data Security—Employers must take every step to ensure employee data is kept safe and secure at all times. One of the biggest concerns for small businesses when it comes to outsourcing payroll and processing is data security. Knowing that a high level of sensitive data is within its care, payroll providers go the extra mile to keep client information safe and secure from cyber-attacks. Every payroll outsourcing company should be equipped with the proper tools and tactics to protect sensitive employee data.
- Tax Compliance—Knowing how to properly manage tax deductions and meet the federally-mandated taxes for Social Security and Medicare is one of the biggest factors in productive payroll management. A payroll outsourcing company can properly ensure the filing of federal, state, and local tax returns, while also processing payment for all payroll tax liabilities. Employers can also benefit from a payroll outsourcing agency’s on-time responses to tax agency inquiries.
- Employee Self-Service—Establishing a process that makes it easy for employees to manage their payroll needs is a valuable way to make payroll processing more efficient. Most payroll outsourcing companies offer employees online self-service capabilities. This technology provides convenience for employees who need quick and easy access to their personal pay information. Many of these companies also offer employers time-clock interface tools and apps to make for a more user-friendly experience for employees.
Four Misconceptions of a Payroll Provider
While payroll outsourcing has become a growing practice, there are also a few common misconceptions about the advantages involved with enlisting a payroll provider. Here are four misconceptions that warrant some clarity.
- Outsourcing payroll is a complicated process. False. Most payroll providers have simple, user-friendly onboarding systems in place to get you easily set up and in motion. A trusted payroll provider like LBMC EP will help you prepare, collecting all information they need in advance, leading to a smooth transition to your new payroll system.
- Outsourcing payroll is costly. Wrong. For many companies, handling payroll in-house can be more expensive than outsourcing. With the amount of time and people it can take to handle payroll tasks, many companies have found that outsourcing payroll has been a better way to steward company resources. Professional payroll providers can also save companies from costly penalties related to tax and compliance.
- Outsourcing payroll is not secure. Not the case. A professional payroll provider will have taken extra precautions to defend against potential data breaches. Knowing that a high level of sensitive data is within its care, payroll providers go the extra mile to keep client information safe and secure from cyberattacks.
- Outsourcing payroll relinquishes control. On the contrary. While a payroll provider will take the lead with payroll processes and record-keeping, employers can benefit from viewing a payroll provider relationship as more of a partnership rather than a service. Maintaining regular communications with your payroll provider will not only provide you with peace of mind, but also will allow you access to any information or reports you need.
Essential Questions to Help Choose a Payroll Service Provider
1. What specific payroll services do you offer?
From general payroll processing to timekeeping to employee self-service to reporting, it should be a priority to first learn about the specific services a payroll provider can offer and which services will be most critical to your business needs.
2. Is your payroll service compatible with our company’s accounting software?
Beware of payroll companies who are unwilling to integrate with other HR and accounting software systems. A payroll provider’s ability to integrate with other types of accounting software platforms will offer you greater flexibility and control.
3. What are the pricing options and fees for your payroll services?
A good payroll provider will not only offer you competitive pricing but will also be able to offer pricing based on your company’s specific needs.
4. How does the payroll service setup and overall process work?
It’s important to know if there’s an extensive learning curve or training involved with the enlisting of a payroll service. The ultimate goal should be a simple and easy transition.
5. Does your payroll service offer payroll tax solutions?
In addition to regular payroll services, a good payroll service provider can offer peace of mind and reduce risk in the complex area of payroll tax compliance.
6. Does your payroll service offer safe and secure handling of customer data?
It’s important to understand how a payroll service provider protects its customer data and sensitive financial information. A good payroll service provider will make sure your accounting and payroll information stays clear from potential hackers.
7. What type of customer support does your payroll service offer?
Every person or business wants to be certain they can receive the customer support needed when necessary. Find out the accessibility and availability of the payroll service provider’s customer support before you enlist.
We are confident that when you search for a payroll solutions service, you will see that LBMC Employment Partners is the best of the bunch.
Let Us Support Your Payroll Outsourcing & Processing Needs
At LBMC Employment Partners, our goal is to provide employers with peace of mind while reducing risk in the complex areas of payroll processing and payroll tax compliance. The benefits above are just a few of the reasons we’ve been recognized as one of the top payroll service providers in Tennessee.