Good business owners know that some jobs are best performed in-house while others are best being outsourced. Payroll is one business function that can easily be outsourced, but only if you parnter with the right company. Outsourcing your payroll function can provide several benefits like:
- Save money
- Focus on your business
- Save time
- Compliance with government regulations
- Expert access
What Are the Benefits of Outsourcing Payroll?
Let’s discuss the most important benefits of outsourcing payroll one by one.
Outsourcing payroll is often an attractive alternative to performing this job in-house because it can help you save money. Taking care of payroll internally is not always the most cost-effective approach. First, you must invest in additional resources to get started, such as:
- Computer equipment
- Manual or electronic accounting programs
- Training to use the program correctly across your HR and finance departments
Additionally, employers must stay up to date on changes in tax rules, personnel, and accounting deadlines. Missing these important changes can be very costly and expose the business to additional liability.
Good times to outsource payroll are when your employees work varying amounts of hours, you have to pay payroll taxes for multiple regions, you are losing money by manual timekeeping, or you have a high turnover rate. In these situations, outsourcing payroll can save both time and money.
Focus on Your Business
Payroll is not a core function of your business, meaning that it does not help you generate revenue for your business.
Because it is a non-core function, for any time and resources that you devote to it, the less time you have to focus on the core competencies of your business. By placing an expert in control of your payroll processing, you can better use your time in your areas of expertise, such as customer service, making new business contacts, networking, or ensuring the quality of your product or service.
Whether you have 10 employees or 100 employees, payroll processing demands significant time and attention. You or your staff may need to input extensive data. The time-consuming process of payroll may involve:
- Calculating payroll for every time period
- Printing, signing, and distributing paychecks to staff
- Calculating and remitting payroll taxes
- Generating reports for an accountant
When you consider the amount of time payroll takes, and the costs associated with running it, you may reach the conclusion that one of the major benefits of outsourcing payroll is the time you can save by delegating this function to a trusted service provider. Time is money, after all.
Additionally, outsourcing payroll can help you avoid unexpected losses of time that may occur if you make a payroll mistake or if you receive notice of an unexpected audit. Your service provider can help avoid these mistakes and tend to these needs of your business, so your staff’s time can be better spent on core functions.
Compliance with Government Regulations
One of the most daunting tasks for small- to mid-sized businesses is complying with government regulations, especially when foreign governments are involved.
Businesses may need to have an in-depth understanding of various regulations to avoid running afoul of pertinent regulations, such as in the following areas:
- Labor law
- Immigration law
- Tax laws
- Social insurance law
- Discrimination law
These rules and regulations are highly technical. Additionally, there may be regional variations, so employers would need to understand national laws as well as regional ones.
In China, for example, employers must withhold and remit the proper amount of taxes by city; there is no standard fee. These types of rules and regulations are often changing, and the business must somehow stay on top of them.
By outsourcing payroll to a trusted service provider, you can delegate this task to a company that is knowledgeable about local and national regulations.
You can avoid penalties or unnecessary audits that are triggered by your non-compliance. A good payroll provider will ensure that your payroll process complies with the current relevant guidelines and ensure that you have a good understanding of payroll laws in the country where your company is operating.
Working with an outsourced payroll provider means you gain access to their years of expertise. This instant access is especially important if you work in multiple jurisdictions and need an expert who is familiar with all local rules and regulations.
Outsourced payroll providers hire individuals who have an in-depth understanding of payroll laws and regulations, including complex payroll tax issues.
Tips on Finding a Company to Assist with Outsourcing Payroll
Now that you know the difference an outsourced payroll provider can make to your business, you need to know how to find a trusted service provider. Consider these tips when searching for a company to provide outsourced payroll services for your business:
- Look for a reputable company – When you are dealing with sensitive and confidential information, you need a company with an exemplary reputation. Additionally, look for a payroll provider who has a strong track record of serving businesses of your size and in your industry.
- Ask what services are provided – A good payroll provider will offer additional services that complement payroll processing, including visa consulting, PEO services, and HR assistance. The provider may also provide tax preparation. Consider the exact scope of services you are receiving when comparing quotes from providers.
- Ensure top security – Much of your payroll information can be accessed electronically, which is helpful to be more mobile. However, you also want to ensure that this information will be safely stored.
- Ask about regulatory compliance capabilities – Ask your potential provider about how they stay on top of changes in the law and ensure that your business will remain compliant at all times.
Before meeting with a potential provider, prepare a list of questions about the services you are considering. A good payroll provider will spend the time necessary to explain their services and the value they can bring to your business.
Contact New Horizons for Payroll Support in Asia
New Horizons offers payroll support and a range of other business services to companies wishing to expand to new countries across Asia. Contact us to learn more or to get a bespoke quotation for your business.