Posts Tagged ‘Payroll Services’

Why Businesses Should Outsource Their Payroll Services

June 6th, 2021

Payroll-management is a complicated and time consuming part of running a business. It requires a large input of money and staff time in order to handle it effectively. A quality payroll service offers a simple and cost-effective means of managing the payroll and bookkeeping obligations.

The benefits are many:

Taxation rules and compliance laws are constantly changing. It is very difficult for a business to remain aware of the current legislation. Outsourcing this obligation relieves the responsibility to keep up to date, and businesses no longer have the stress of trying to accurately complete their taxation requirements. Further, many small -business owners do not have the level of experience or training to effectively undertake this vital part of their company’s accounting, which thereby risks taxation penalties if mistakes are made.

Payroll management can be very complex. Some employees may currently be hired on an hourly basis, whilst others are on a salary or on a commission. Holiday pay, leave loadings and a multitude of other variants must also be taken into account. The expense of employing a staff member to handle these complexities can be much greater than using a bookkeeping service, which specializes in this area and thus is aware of all the factors to consider.

Outsourced payroll and bookkeeping services also offer many additional services that a business could use to manage and improve its operations. Many will prepare payroll management reports which improve fiscal budget reports. These professional accountants and consultants may also offer to advise business managers of their responsibility regarding such government funds as Medicare, or offer consulting to reduce tax levels. Further, bank accounts can be prepared and invoices entered.

The cost of using a payroll service can be considerably less for small to medium businesses that using staff members to handle bookkeeping requirements. Using a CPA who is on staff does ensure that the payroll is completed correctly, but requires paying a high salary in order to have this benefit. Outsources bookkeeping gives the same benefit but without as high a cost. A set monthly fee is usually charged, allowing for control in the amount of money spent on accounting. This assists in accurate budgeting, and avoids unexpected accounting costs.

The business avoids the time commitment and expense of recruiting and training temporary staff during periods of additional accounting loads. Advertising to attract this new staff and recruitment fees can be costly. There is also the cost in lost productivity of using existing staff to interview potential new employees, and of then training them to a sufficient level so as to be able to complete necessary tasks. Termination costs are also a consideration, when the additional employees are no longer required. When using a payroll company, however, any extra accounting requirements can be completed for a comparatively small additional fee.