When you think of the HR-related activities that cost small business leaders the most time, payroll is usually at the top of the list. However, there are good reasons why payroll is so time consuming – the ramifications from both a compliance and employee standpoint are substantial. This is why it’s crucial to accurately and efficiently manage payroll.
Small business leaders looking to simplify their payroll have increasingly looked to outsourcing
as an option for their business. As a matter of fact, payroll services
have quickly become one of the most popular HR functions to outsource. When you look at the benefits payroll outsourcing provides (which we will discuss shortly), it becomes clear why so many small businesses choose this method.
In most cases, outsourcing companies offer simple, easy-to-use technology to help their clients tackle payroll. This helps small businesses ensure their payroll is done in a timely, compliant manner
. As an added bonus, you may also have access to payroll specialists that will help with any questions or concerns as they arise.
But the main reason why small businesses choose to outsource their payroll are the benefits that come with this decision. Let’s take a closer look at a few of these and why they are important for small businesses today.
1) Government Compliance and Regulatory Expertise
We have written before about the complexities of HR compliance
. Payroll plays an important role in keeping a company compliant with various laws and regulations. Even the smallest of errors could lead to severe consequences for businesses, including audits and penalties.
One of the biggest challenges with payroll compliance is that regulations can change constantly, sometimes numerous times per year. If you don’t stay on top of these updates, it’s possible to make payroll mistakes that could lead to compliance issues.
Payroll outsourcing companies are experts in compliance and regulatory matters. Not only is their software designed to help make inputting payroll information simple and less time consuming, but it also helps to prevent compliance issues from arising. In addition, these companies monitor regulation changes daily, and can alert their clients of any upcoming updates that need to be made. This can be invaluable to a small business owner.
2) Save Time and Focus on the Core of the Business
We have already mentioned that one of the common reasons companies look to outsource their payroll is to save time. Much like when companies outsource other areas of HR
, choosing this approach with payroll can be a major boost to productivity and efficiency.
Instead of having to spend hours working on payroll (and making sure to keep compliant while doing so), small business leaders who choose to outsource their payroll services can instead spend more time on the activities that will ultimately lead to business growth. This can be one of the factors that is holding a small business back from reaching their full potential.
3) Improved Software and Technology
The rise of human resources technology has drastically changed how businesses of all sizes approach HR. What was once a very manual and tedious function now relies heavily on technology to make work processes easier and quicker, all while keeping compliance in mind.
HR technology is another benefit that comes with outsourcing payroll. Today’s payroll outsourcing companies provide their clients with best-in-class software that makes payroll easier than ever before. But simplifying technology doesn’t mean clients lose out on features and capabilities with payroll tech. Some key features of leading payroll software include:
- Mobile functionality
- Customizable reporting capabilities
- Easy W-2 compliance and filling
- 24/7 cloud-based software
While these are just some examples, upgrading to modern payroll technology will greatly improve efficiency and save time for small business leaders.
Payroll Outsourcing Can Help Your Company Grow
Running a small business requires a lot of time, dedication, and focus. Small businesses who choose to outsource their payroll (and other HR services
) can address all their human resources needs while keeping full attention on their business. And all this can happen while ensuring compliance and regulatory excellence.
Outsourcing payroll may not be the best fit for all small businesses. But for those companies who are considering this approach, gaining a full understanding of what is offered and what can be expected is extremely beneficial. Outsourcing your payroll
could end up being a great decision for the long-term success of your small business.
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