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5 Reasons You Should Be Outsourcing Payroll

31 Jan

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A strong payroll department is one of the most important parts of a successful business. Every thriving business needs its payroll to be accurate and timely. Even the happiest, most productive employee will be less than thrilled if their paycheck is incorrect—or doesn’t arrive at all. 

While small businesses, and even some larger ones, typically perform payroll functions in-house, more companies are turning to outside payroll providers to handle the essential functions required to make sure employees get paid correctly and on time. 

If your company isn’t outsourcing payroll, here are five reasons why you should consider doing so.

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Using an Outside Payroll Company Saves Time

While large companies may hire employees to manage payroll, in smaller organizations the task often falls to the bookkeeper, accounts payable department, manager, or business owner. In most cases, these individuals have additional duties to handle. This makes juggling responsibilities difficult and increases the likelihood of errors.

Outsourcing employee paycheck distribution removes that burden from your team and allows them to focus on other, more pressing tasks. If you aren’t sure about making the decision to outsource, a good exercise would be to calculate how much time your employee(s) spends on payroll management. Chances are, you will be surprised at how much time it eats up—time that could be better spent on improving your business. 

Payroll Contractors Save Money

What does your current payroll process look like? Are your employees handling it well? Are they working overtime to get everything done? If you have workers managing your payroll who aren’t properly trained, your business is much more prone to errors, which could become quite costly. It’s more cost-effective to outsource your payroll to a professional provider.

For most small and medium-sized businesses, outsourcing payroll saves money. According to the IRS, 40% of small to medium-sized businesses get fined annually for making payroll errors. Federal, state, and local regulations change frequently, so this is not uncommon. With an outsourced payroll provider, you can let go of your compliance concerns and save money by avoiding fines and penalties. Companies that outsource their payroll save 18% over companies that manage it in-house.

It’s not just the weekly or bi-weekly payroll tasks that take up valuable employee time and financial resources. Your employees also have to manage the tax filing processa time-consuming and often confusing job for anyone. Balancing other administrative duties on top of taxes leaves much more room for mistakes. In fact, incorrect tax filing can also result in hefty fines for your business.

Outsourcing Increases Reliability and Accountability

Many organizations prefer to have payroll done externally for one important reason: security. If you hand off payroll functions to an unscrupulous individual, the chances of your organization being the victim of theft increase exponentially. After all, payroll fraud happens in 27% of all businesses. The average loss in such instances is almost $50,000!

Most payroll vendors have security procedures in place to prevent the loss of assets and provide extensive training to employees on how to manage payroll. This helps to avoid common costly errors. In the event that something does go wrong, the payroll company, not you, is usually liable for that mistake. Payroll vendors also have the resources to pinpoint the problem and rectify it immediately—something that can take days or weeks when handled internally.

Payroll Specialists Offer Greater Accuracy

Are you up to date on every tax law and regulation that affects your everyday operations? Large businesses with dedicated departments will likely have employees who know the ins and outs of the laws regarding payroll. With small businesses, however, it can be hard for everyone to stay on top of that information. 

Using an outside service is helpful to make sure that your company’s payroll is managed within the scope of current laws. In fact, many services continuously update software to allow for changes and adjustments to ensure compliance on every front. By using an outside vendor, you can rest better at night, knowing that your payroll is being properly taken care of by professionals.

Tax Benefits

Rendering the services of an outside payroll provider allows for business expense tax write-offs, but the benefits go beyond deductions. Many businesses receive fines for incorrect or late tax filings each year, fines that can easily be avoided. Using outdated tax tables can be disastrous to your business’ success. A payroll company will help ensure that your tax filings are handled correctly and filed on time, saving you money and headaches.

Your time and money are valuable. By outsourcing your payroll to a company like VensureHR, you are selecting a payroll solution that allows you to spend your time generating revenue, strategizing, and growing your team and business operations.

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Contact VensureHR

With VensureHR, our dedicated payroll experts can take a wide array of administrative tasks off your hands, like issuing pay and direct deposits, preparing, filing, and settling payroll taxes, generating and providing tax forms, managing garnishments and unemployment, tracking employee-paid personal and sick leave, and more. Our payroll processing services are curated to help grow your business while providing you with a solid foundation to scale your company quickly and efficiently. 

If nothing else, handing payroll off to qualified professionals reduces your worry and stress and allows you to focus your time on running your business efficiently.
Do you want to simplify your payroll processes with customized business solutions? Schedule a consultation with our payroll specialists today.

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