How To Save Money by Outsourcing Your Payroll
We can all agree that the headline doesn’t make any sense. How can you save money by paying someone to do your payroll? Well, let us explain.
We are not all money savvy people, and the people we have on the job may not meet our demands or run payroll operations efficiently. So, why not let a professional manage your payroll?
Ultimately, there will be less stress, greater accountability, and more funds saved in the long run. You can go about expanding your business and driving more revenue with one less thing on your mind come month-end.
Now, let us establish what it looks like to outsource your payroll. Payroll providers can do everything from calculating pay and deductions to transferring money into your employee’s account and filing associated taxes. Or they might only handle a portion of the tasks depending on your needs and affordability.
Like many people, we have the same burning question, which starts with, why? Let’s point out a few why’s and a few benefits of outsourcing this operation.
Why should you outsource your payroll and how does it save money?
Running payroll can be complicated and time-consuming. Plus, there are substantial legal requirements and potential risks of getting things wrong. For these reasons, many businesses will partner with expert payroll providers for advice or leave the entire payroll process up to them.
In addition, payroll providers can often do your payroll at a relatively lower cost. Being so cost-effective comes down to the software they use to automate many of the tasks involved. If most of it is automated, then what services do they provide exactly?
Examples of payroll services
Payroll providers may offer different levels of service, which you can choose depending on what you need. But they’re generally all capable of:
- Calculating pay (including benefits and reimbursements)
- Deducting taxes
- Making any other deductions, such as retirement contributions
- Filing (and even paying) taxes with the tax office
- Making payments to employees
- Keeping payroll records
They can also support you to get your payroll right, which means staying on top of changes to legislation. If certain aspects aren’t apparent or are confusing, they can guide you on what is required by law and best practices in your industry. By leveraging experts in the field, you can enjoy peace of mind knowing that things are being taken care of by someone who knows what they’re doing.
However, this is not to say it will be a hands-free process from the get-go as there may be some areas that need your attention or require updating before outsourcing your payroll. In addition, if you have any employees that require special attention, then it may be beneficial to provide them with additional personal support.
What should you consider when choosing a payroll provider?
As mentioned before, there are many benefits of outsourcing your payroll (such as time and money savings), but not all companies will offer the same service or put in the same levels of effort. The ultimate goal is to find one that is right for your individual needs.
With all these services considered, the next question is, how do you choose a good payroll service provider?
Four things to consider when choosing a payroll provider
Get the right level of service
The first thing you will want to consider is how much of their services you need. Some companies may do your monthly payroll for a flat fee, while others have variable fees depending on the number of employees and types of deductions.
You don’t want to be paying for what you don’t need. Understand what you’re paying for, what you’ll need to handle in-house, and what you’ll pay for extra services.
Automate the easy stuff
Be sure your provider uses software to automate most tasks, so you’re not paying professional fees for basic admin jobs. You may be able to do most payroll tasks in-house, but if you don’t have the right technology, plenty of valuable time is lost, which you could be spending on more high-level tasks.
By hiring a top outsourcing agency, you can access the latest software to optimise your payroll process. This solution will save you costs in the long run, increase the efficiency of your processes and allow you to focus on operations that bring in revenue.
Check employee details regularly
Employees sometimes change jobs or leave your company, so their personal information must be up to date with payroll providers. And when you hire new employees, your payroll provider should enter them into the system as soon as possible.
Ask what processes the outsourcing agency has for checking and updating employee information. Doing this will ensure that you are aware of all financial obligations to your employees and minimise tax liabilities. A change in an employee’s details may also affect legal requirements, so providers must be vigilant about correcting.
Secure your data
One final consideration is security. Your payroll provider will have access to private employee information, so it’s essential to know how it is stored and handled.
Ask them what safeguards are in place to ensure your data is secure, such as data backup systems, encryption and password protection.
Every rand counts
With payroll outsourcing, it often comes down to what’s most efficient and cost-effective for your business. It pays to do your homework and assess your business needs before making a decision. If you get the right provider, you’ll spend less money on your payroll and have more time for what you do best – running and growing your business.
Turn your cents into rands with a payroll service provider that oversees more than 12,000 worldwide payroll transactions administered by in-house specialists.Contact the MASA group today for your payroll needs.