What Is Payroll Outsourcing?
Payroll outsourcing means hiring a third-party company to handle all of your company’s payroll, which is everything from getting your employees in the system to getting them their first paycheck. Payroll outsourcing usually includes calculating employees’ salaries or wages, time tracking, calculating federal and state deductions, local payroll taxes, and other Human Resource services.
The benefits of outsourcing payroll processing include taking all your payroll tasks off your plate. A full-service payroll provider handles timekeeping, payroll deductions, tax compliance, and even HR support. Having the right outside payroll team can mean increased productivity, efficiency, and payroll accuracy for your business, saving you time and increasing your peace of mind.
Why Should I Outsource Payroll?
There are many benefits for an employer who chooses to outsource their payroll. The top benefits include a lack of financial or regulatory knowledge, lack of time, or a large volume of employees with different pay and benefit needs, which might all drive an employer to seek an outside service provider for payroll. Here are some of the most common benefits to employers for choosing to hire an outside specialist to handle their payroll needs.
Timesaved
As a business owner, you know your time is the most valuable resource you have. As soon as you hire your first employee, you are signing up for a recurring payroll workload every week or two. This isn’t just tracking hours and dollars. It also means accounting for payroll taxes – for you and your employee – and tracking any other deductions your employee might have for child support, retirement plans, or health insurance. After all this, you have verification of these figures by another person in your business, time spent cutting and signing checks, and, of course, quarterly tax return filing obligations and yearly W-2 reckoning. Multiply the time spent accounting for all this by the number of employees you have, and you’re looking at quite a bit of time every pay cycle that you could have been using to grow your business.
Minimize Errors
As you can imagine, manually completing payroll for multiple employees comes with a much higher risk of error. There are so many moving parts to paying each employee, and the risk is multiplied (at least to some extent) by the fact that this process has to be done quite often.
Now, you might not have to worry about paying your employee the wrong amount – they would be sure to tell you if you did! You should be more concerned about the tax consequences of improperly withholding payroll taxes. You won’t go to jail – but your business will suffer under heavy IRS and State fines and penalties. One of the biggest benefits of outsourcing payroll is knowing that you and your employees’ payroll tasks are handled by dedicated experts.
Use Your In-House Staff More Effectively
Outsourcing routine tasks just makes good business sense. This allows your in-house staff to focus on the projects and goals that serve your customer and grow your company. Small business owners can spend 5-plus hours calculating and organizing payroll taxes per pay period. That’s a lot of time that could be spent on business growth.
Sure, outsourcing payroll comes with a cost, but is that cost worth the lost opportunity for growth?
The list of things for a business owner to keep up with never ends, and all of it comes with lost mental space for doing what you do best: serving your customers.
You can’t be an expert on doing everything for your business, and you shouldn’t try. Let specialists handle and automate as much of the routine, back-office stuff as possible – and we don’t just mean payroll. We want you to succeed, and that means you need to draw on as many experts as you can. Payroll expertise is just one part of that.
Access Payroll Technology
Payroll software may be out of reach financially for your business, but that doesn’t mean that you have to do without it. Outsourcing payroll means gaining access to a higher level of payroll automation than you would be able to have on your own. Since payroll service providers service many clients, they are able to invest in more advanced software packages than individual businesses often can.
Increased Data Security
Outsourcing your payroll doesn’t mean compromising your employees’ data security. In fact, because of the higher level of technology available, payroll service providers offer the latest in data security for all their clients and employees. When you are choosing a payroll provider, be sure to ask about their data security practices – and if they have ever been audited.
Integration With Your Existing Accounting Software
You won’t need to worry about providing manual payroll records to your outside provider, or needing to request payroll data to input into your accounting software. Outside payroll service programs are still able to integrate with major accounting software programs for seamless recordkeeping.
How does outsourcing payroll work?
Once you have chosen your payroll provider, there are three steps to getting your payroll set up. First, you will need to provide your relevant business information. Your business name, address, EIN number, employee data and historical payroll information, and business bank account information will all be collected, verified, and tested before your payroll service is launched.
Next, you will let your payroll provider know about your employees’ pay cycle and frequency, and decide when the first payroll through the new provider will be launched.
Finally, you’re ready to go! If your payroll provider is CheckWise, you will have a dedicated account manager who has been involved in your setup process to supervise your payroll launch.
Choosing CheckWise for your payroll service provider means you’re getting top-quality payroll processing without losing the small-business feel. We have experience with payroll for multiple industries including nonprofits. We’re with you every step of the way to ensure that you have the smoothest transition possible, and we take the time to ensure our payroll for you is tailored to fit your business needs. Contact us today to see how a small company can make a big difference.
