Benefits of Outsourcing Payroll Services
Aug 25, 2021
It is rightly said that Employees are the biggest assets for any organization, which highlights how important the Payroll Function is for an organization. Although, Payroll is a very time-consuming and cumbersome service, yet some companies opt to do it by themselves. However, is it actually worth the effort? Can economies of scale be achieved by outsourcing Payroll Services? In this article, we will have a look at What Payroll Outsourcing is and what are the pros and cons of outsourcing it.
What is Payroll Outsourcing? Payroll outsourcing is a business process in which the organization hires an external party to manage all payroll functions to help them save effort, money, and time. Outsourced payroll solutions provide increased accuracy and efficiency when compared to in-house payroll management as it gets prepared, analyzed, and evaluated by qualified professionals.
The key goals of Outsourcing Payroll Services are 3 folds:
- Enables management to focus on organisations key operations and frees up the time
- Reduces expenses and costs and improves accuracy
- Since Outsourcing services are provided by professionals in that specific field, so it helps them to provide the business with the latest technology platform to meet compliances.
Benefits of Outsourcing Payroll Services:
There a quite a lot of benefits in this area of your business by outsourcing experts
- Considerable Time Saved: Regardless of the number of employees a company has, payroll processing is a cumbersome task. This comes at the cost of investing these efforts which can actually generate much more value to the business. Outsourcing payroll allows management to concentrate on their core business and frees up the top management, human resources, or finance personnel to work more on strategic tasks that could ultimately improve your bottom line. Outsourcing payroll immediately frees up precious time. Management only needs to get in touch with their outsourced payroll specialist by approving time once each pay period.
- Reduced Costs: In the case of a larger organization size, maintaining payroll processes and operations within the organization could potentially involve much higher costs. On the other hand, a Business Process Outsourcing firm having Payroll Services as its core business operations will be able to do the same task with much higher efficiency and effectiveness. By outsourcing, it can be ensured that each and everything with regards to the Payroll including inquiries, taxes, and other statutory filings can be done in a cost-efficient manner.
- Benefiting from the Advanced Technology: Over the course of time, there has been a drastic improvement in the technologies, even in Payroll Services. Many outsourcing companies have opted for these newer technologies, due to which they are able to manage these services seamlessly, and efficiently. Outsourcing the services would enable the business houses to utilize these new technologies indirectly and derive benefits from them. Additionally, there is a better level of transparency and visibility to manage the business data.
- Compliance: There are many small businesses and even larger ones which are not able to devote time and comply with all the regulatory and statutory compliances, like employee benefits, NPS, RTI FIling, etc. leading to certain defaults and other compliance related issues. Outsourcing companies being expert in their domain, have complete knowledge of all the compliances to be followed. They have desired experienced professionals to help the business organizations in all the compliances. Without much hassle and other obligations, this is a very important benefit of getting this done through an outsourcing company.
This was a brief list of benefits which an organization can derive by outsourcing their Payroll Services. However, there are certain disadvantages to the same, which are as follows:
- Possibility of Delayed Access to Payroll Data: There are possibilities in an organization that the payroll data may be required on a very short notice for a particular employee or for any government compliances. Here comes a major disadvantage in outsourcing payroll services, wherein the outsourcing company may not be able to process the data on a short notice. This can cause unnecessary delays and may even lead to a monetary loss.
- Inability to modify the Payroll: Incase of any changes or any temporary changes are to be made by the business for a particular employee, it is quite possible that it wouldn’t be made immediately by the outsourcing company, since everything is fixed as per the pre-fixed rules and norms.
- Additional Expenses Incurred: Everything comes at a cost of some or the other thing. Outsourcing Payroll Services will lead to incurring extra expenses on providing a service which can be undertaken within the organization itself..
Although, there are many risks and other disadvantages of outsourcing payroll services, however, we at Sand Martin Consultants Pvt. Ltd. assure our customers that their data would be maintained with utmost security and the services would be completely hassle free and all the requirements of our customers would be fulfilled.
We have a robust payroll department providing end to end payroll services for the last 2 decades to top Accounting firms all over the world including UK, US, Australia from Computation to RTI Filing and includes Pension uploads as well. Contact us today for no strings attached free trial of our services