Why Outsource Your Payroll?
Outsourcing payroll to a third party provides a number of benefits to all kinds of businesses. Outsourcing puts your payroll in the hands of the experts, allowing you to focus better on your business, while taking advantage of technology and expertise that you may not be able to afford in-house.
Payroll is one of those processes that is essential, but not critical to sales and business growth. This is why payroll can feel like a drain on work hours and resources – resources that could better spent in making money. Payroll is complex and pay runs need to be made on a regular basis, so this function doesn’t just go away once it’s done. The benefits of outsourcing your payroll means that you can:
- Get accurate, compliant payroll on time, every time
- Ensure security
- Get time back
- Save on costs
Why Outsource Your Payroll?
The benefits of outsourcing a business’s payroll function vary from one company to another, however there are key advantages that are common across all businesses.
1) Payroll Accuracy & Guaranteed Compliance
Payroll errors are far more commonplace than you might think. Processing the average payroll for one person requires 14 pieces of personal data. If any one of them is wrong, you have a payroll error.
Payroll errors don’t just frustrate your staff, they can cost you money. For example, late or incorrect submission of employee tax can lead to fines from the government.
You also need to consider changes to reporting obligations and legislative compliance. Small businesses, in particular, can find it challenging to keep on top of the frequent, and often complicated changes to tax codes and legislation. Staying updated involves being aware that changes have happened and being able to implement new processes as needed.
By outsourcing your payroll to a third party expert, you take away all that hassle. A professional payroll company employs payroll experts and uses specialised technology to ensure accurate payroll that’s processed on time, every time. They also are the first to know of tax code and legislative changes that affect payroll and are adept at maintaining compliant payroll.
There are security risks involved when managing confidential payroll data in-house. These include:
Data breach by intention – for example, a disgruntled employee leaking confidential employee information.
Cyber-attacks – the risk of a cyber-attack is very prevalent and very real. Phishing emails are a specific area to look out for, e.g. an employee could be tricked into sharing payroll information via email.
This means your business has a responsibility to make sure staff are alert and knowledgeable about cyber-attacks at all times. To instil an internal security culture, an investment in training and resources is required to educate employees on the risks of a cybersecurity breach. To ensure staff continue to be alert, refresher training needs to be undertaken frequently. This is additional time and money that’s needed just to ensure in-house payroll remains secure.
By outsourcing your payroll functions, you can ensure your data will be protected by state-of-the-art systems. At FMP Global, we are ISO accredited and GDPR compliant.
3) Get Time Back
Outsourcing your payroll gives your workforce more time to focus on doing what your business does best. 30% of small businesses spend over six hours each month on payroll processing; time that can be better spent elsewhere.
For large businesses, handling international payroll and processing the pay of hundreds of employees requires departments of people dedicated to payroll. Outsourcing your payroll gives you back that time and enables you to spend more time making money – and less time paying money.
4) Cost Savings
Depending on your business and its size, outsourcing your payroll could generate considerable cost savings in the long-term. Outsourcing allows you to access efficient payroll services without having to employ a dedicated person or team internally.
You save on people and on infrastructure. For new businesses, this reduces the upfront cost of starting up, while for established businesses, it means more money for shareholders and key stakeholders in your enterprise. Many companies find that overall, outsourcing payroll results in a cost saving rather than a costly outlay.
Handling payroll is a time-consuming task and late filing of forms or errors and omissions can all lead to expensive fines. New legislation can change what is required by a company, and it doesn’t take long for penalties to add up, wasting company resources and leading to extra administration and stress.