Maintaining and updating the company payroll is one of the most essential tasks of business, but it’s one of the most time consuming.
Luckily, more and more businesses are choosing to outsource non-core functions in their operations, and their pay run is one such function.
Outsourcing payroll tasks to a trusted payroll provider is a fantastic option for businesses who are looking to streamline their operations and free up more of their time.
But what are payroll services, and what are the benefits of using one?
What is an Outsourced Payroll Service?
Payroll services are third-party providers that assist with or take over all aspects of another business’s payroll system.
Depending on the needs of their client, the payroll company carries out services ranging from payment processing to filing periodic taxes and worker’s compensation claims using a variety of cutting edge technology and software.
Payroll services used to focus just on standard payment deliveries. But there are many modern services these days that can also help companies with tracking employee attendance, collecting time sheet information and following relevant payroll laws and regulations.
What are the Benefits of Outsourcing Payroll?
Recruitment Assistance
Payroll services are effective during the business recruitment process for small businesses by supporting the onboarding of new employees.
They can also streamline the collection and setting up of payroll information for new employees and their tax information, including everything from the relevant awards to establishing superannuation contributions.
Enhanced Compliance
Maintaining Australian payroll compliance can be difficult, particularly given the continual changes that occur in payroll legislation.
Outsourcing your payroll services helps to secure compliance by guaranteeing the payment of required taxes, withholding correct amounts, maintaining obligations under the relevant employee agreements and/or industrial awards, and ensuring you’re across any changes to legislation that may impact your payroll.
Higher Accuracy
Manually processing your payroll leaves you and your company open to accidental errors, mistakes and inefficiencies. Mistakes are common, largely because of the need for correct calculations, accurate payroll data and up-to-date records.
Businesses that don’t use a payroll outsourcing service and commit to entering all this data manually are prone to making mistakes like underpaying or overpaying their workers. This can result in non-compliance and a range of different penalties.
Payroll outsourcing offers you the peace of mind you need as a business owner by covering your payroll requirements instead of relying on in house teams.
Data Protection and Security
Choosing the right payroll team to handle your processes allows you to put your highly important company data in the hands of trusted experts.
Payroll outsourcing providers such as PayCat use state-of-the-art security technology to help safeguard customer data from the threat of cyber attacks or data loss.
Reduced Costs
Payroll outsourcing services vary in cost, but investing in these services gives you more of your own valuable time back and helps mitigate the risk of mistakes. This can save you thousands of minutes and dollars, and is much more cost effective in the long run.
Factors to Consider When Outsourcing Payroll
- Budget: Any payroll outsourcing service should be chosen based on the compatibility of their pricing plans with the company's budget. Some services operate on a long-term contract that includes yearly contracts, while others operate on a short-term contract with monthly commitments, so make sure you’re clear on what you can allocate towards this service.
- Advanced Features: Some payroll service providers offer their users several advanced features such as retirement plan administration, HR solutions and other benefits, so you’ll need to decide whether such features would be genuinely useful or just an added unnecessary cost.
- Customer Service: A good payroll provider should possess an employee self service option that allows them to log in and view records of their salary details. Additionally, some services offer 24/7 help desks with professionals who can help you with any payroll questions or concerns you might have.
How Does Payroll Outsourcing Work?
There are typically a few different types of options available with payroll outsourcing services.
Choosing the right one depends on things like your budget, the size of your company and what you hope to achieve from outsourcing your payroll.
Some providers offer full-service payroll outsourcing and oversee the entirety of your payroll from start to finish. All you’re required to do is make sure they have the most up-to-date information on your employees.
Full-service providers can be a great option for time-poor employers who don’t mind handing the reins over to a third-party.
Other payroll providers offer a service that can be more hands-on for employers.
These providers still manage the more complex tasks for payroll management such as taxes and deductions, but require you to record and update items like employee time sheets and other records.
This can be a fantastic option for business owners who feel comfortable with their payroll structure and have the time to get involved.
Tips for Choosing the Best Payroll Outsourcing Provider
Know what you need from payroll outsourcing services
Figure out what you want and need from a third-party provider before you start trying to find one.
If you don’t know what kind of service you’ll need, you could end up paying more for features you don’t actually require, or you might find you’ve signed up for a provider that is missing an integral function that you need.
Keep employee details as up to date as possible
Business owners who outsource to payroll experts need to make sure they’re consistently providing accurate and relevant employee information.
Changes that occur and aren’t picked up on in the payroll side of things can result in financial or taxation mistakes, which can be costly to fix.
Get to know their systems
Even if you choose outsourced payroll services, don’t be afraid to get stuck into their software or platform and familiarise yourself with it.
You’ll be much more likely to pick up on potential mistakes, errors and inconsistencies if you’re confident with using the service.
Key Takeaways
Save time with payroll solutions that work. Contact one of our experienced payroll professionals today to find out how we can help you.
