What Are The Pros And Cons Of Outsourcing Your Payroll

Payroll Outsourcing – What is it All About?

Welcome to the world of payroll outsourcing. No matter the size of your company, numerous businesses have opted to outsource the tedious task of managing payroll to a third party. There are various reasons why companies and businesses choose to outsource. It can be because of better technology and expertise provided by the third party, or it saves time and money and reduces the margin for error.

The third party will be responsible for accounting, tax and legal support. They will also be responsible for timely and accurate paycheck distribution. The external provider will also calculate benefits incentives, paid time offs, severance payments, commission, etc.

There are several pros and cons to outsourcing your payroll. Let’s delve into what they might be; only then can you evaluate and decide.

Pros of Outsourcing Payroll

Cost Reduction

The reason outsourcing payroll processing is popular is because of its cost-benefit. When you employ an in-house payroll team, numerous attachments come along. First is the expense of maintaining the payroll team, secondly having the correct and up-to-date payroll processing software, and then managing employee doubts and queries.

Even if having an in-house team seems appealing, you have to consider hiring and setting up. Also, as your business expands and the number of employees grows, maintaining an in-house payroll team skyrockets. Many companies often underestimate the extensive resources and workforce necessary to manage payroll. If you have an in-house team, you will also have to be well informed about tax rules and account deadlines.

When you outsource your payroll, you can save approximately 18 percent more than companies that choose in-house. You can save the money and invest in the development of your business, where it matters rather than software training, computer equipment and more for payroll.

Time Saver

There are a lot of complicated and intricate details that go into processing payroll. Some of it includes tracking new hires and paid time offs, terminations, etc. You need to allocate your finance department to maintain federal and state regulations. The hours can pile up when you delve deep into the nitty-gritty of it all, hours that you could have invested toward the business instead of mundane tasks.

You can save time and energy when you outsource payroll and better utilize your employees and resources. You can invest more time concretizing your HR strategy and improving your onboarding experience and administrative operations. As your employees grow, you will not be consumed by payroll processing. Instead, you will be able to delegate it to a team of professionals equipped to handle large volumes of data and ensure accuracy.

Improved Processing

Everything’s better when you have the latest technology and a highly-skilled individual. When you outsource your payroll management, you attain access to some of the most qualified individuals in the industry and the latest technology that enhances the speed of the tasks. You can expect faster processing times, reduced error rates, and other bonuses.

Advanced Technology

Often companies choose to outsource payroll because of technological limitations rather than cost reductions. The best stress reliever is good technology that enhances accuracy and speed.
After the introduction of cloud technology, the payroll industry has improved drastically. If you look at the benefits, compliance, accuracy and integration of various technologies top the list.

Compliance Assurance

Many countries and states have various laws, regulations, and labour codes that must be adequately maintained. Payroll service providers are well aware and have an in-depth understanding of these laws, codes and legislations. This ensures that the employer can remain compliant.

Cons of Outsourcing Payroll

Loss of Control

When a third party handles your payroll, it can limit your control over the process. You do not have complete control or access to all the information. It can cause an issue when you have to pay for extra work done by the payroll vendor.

Confidentiality

One of the biggest concerns that plague when outsourcing payroll is the issue of confidentiality. You are handing over intimate details of your employees to a third party. You need to ensure that data protection policies are in place to avoid any risk. Otherwise, it might lead to risks such as identity theft and more

Coordination

Coordinating tasks between the company and payroll provider can become time-consuming. The company also needs to provide constant support for the payroll providers to achieve and accomplish their tasks.

Why Choose Apex Accounting To Be Your Payroll Provider

Apex Accounting is your answer if you are on your hunt to find the perfect payroll provider in Canada for small businesses. Apex Accounting provides customized payroll services in Canada to suit your needs. We have experienced professionals who administer the nest techniques to ensure results. To choose Apex Accounting as your payroll service provider for your small business, call us at (647) 979-7728 or email us at info@apexaccounting.ca.