Outsourcing has existed in the business world for as long as people have had a need for expertise. Any facet of your business that you cannot handle yourself, or in-house, was traditionally outsourced to someone who had the ability and the skills to complete the work effectively. Now in a world that is becoming increasingly connected, outsourcing has become commonplace in all sorts of industries and businesses.
From marketing to product development to payroll, companies are outsourcing more of their day-to-day tasks to businesses with more expertise or who are operating in cheaper locations. But, when it comes to something as confidential as your business finances, why outsource payroll at all? Wouldn’t this be best kept in-house? The fact is, outsourcing payroll can save your businesses a huge amount of time and money, which you can reinvest into other areas of your operations.
Let’s take a closer look at just a few reasons why you should consider outsourcing payroll for your business.
1. Work Efficiently
Payroll outsourcing is an efficient way to pay your employees. Payroll businesses use the most up-to-date, integrated software to complete tasks that would take most payroll officers hours to handle. Inputting hours, accurately figuring tax and superannuation contributions and filing end-of-year reports can be very time-consuming. Outsourcing your payroll to an experienced outfit means that you can be sure that your payroll and tax obligations are completed efficiently and accurately.
2. Error-Free Calculations
Handing over your payroll tasks to a professional third-party can almost guarantee that your company’s books will be error-free. Most outsourcing companies have the latest payroll software that is compatible with the ATO and their requirements. These programs are equipped to calculate large amounts of data, avoiding human error. This ensures you have no issues with your reports down the line, as all the information will be up-to-date and correct.
3. Lower Labour Costs
While it might seem as though outsourcing would be extremely expensive, in many ways it can reduce costs. For the average business to employ two full-time payroll officers, they need to pay each employee a competitive salary and provide them with benefits. Depending on the location of your company, employing payroll officers can cost more than outsourcing your payroll tasks to a third-party.
4. Compliance Issues
Payroll companies are always up-to-date with any changes in relation to reporting tax and superannuation. Because payroll is their expertise, they are up to speed with ATO rules and regulations. For example, businesses currently trying to figure out how to become single touch compliant might find outsourcing a more practical choice simply because payroll companies are already compliant with the tax authority.
5. Payroll Security
Again, with the right payroll software, businesses save countless hours and dollars in safeguarding employee information. Payroll companies use software that safeguards employee information against hackers and other possible security breaches. Furthermore, because employee information is held at an offsite location, businesses do not have to worry as much about their data being lost or stolen from their premises.
6. Payroll Expertise
Businesses that outsource payroll get the benefit of working with skilled and knowledgeable professionals. With their expertise, outside payroll officers ensure that all of your payroll tasks are completed correctly and your payroll process run smoothly. Also, it’s important to remember that these payroll officers work exclusively with payroll all day long, so your payroll tasks are safely in the hands of people who have the knowledge to handle them effectively.
7. Streamlined System
Outsourcing payroll tasks will streamline your business processes and ensure that your business runs smoothly. There is no need to have separate office space for payroll officers with different duties or to have different software and other technology installed solely for their use. Outsourcing payroll to another company means all of your payroll tasks and responsibilities are under one umbrella and will be completely streamlined so that they operate effectively as a stand-alone element of your business.
8. Focus On Business
Finally, with the enormous task of payroll taken care of, business owners and staff can focus on the primary duties of their company. When you consider how many hours a payroll officer takes to pay salaries, it makes sense to reallocate those man-hours to other tasks that are more fundamental to the daily operations of your business. Furthermore, lightening the load of payroll can also alleviate some of the stresses associated with it.
The Benefits Of Outsourcing Payroll
Getting tangled up in reporting taxes and superannuation contributions eats up a lot of time and it’s important that you do what you can to ensure you utilise your limited time in your business. By outsourcing payroll to a reputable company, your business can focus on making great products, improving your services, building on those all-important customer relationships and, ultimately, increasing your bottom line and growing your business. To understand more about why outsource payroll, take a look at our article here.