In the past small businesses didn’t have to worry about the increasing complexity of government tax regulations. Tax rules were fairly simple and straight forward, but as time wore on the tax rules became more and more complicated. In the past bookkeepers remained with the same company or organization for many years. There was a sense of loyalty. In the past many organizations used paper processes to do their payroll. Today new technology has created time saving methods for processing payrolls.
SurePayroll, a PayChex® company suggests that there are 8 benefits to outsourcing payroll. The first benefit mentioned is time restraints. Small business owners specifically claim that bookkeeping tasks take time away from the business. It isn’t just time restraints that bog down businesses. It is also the mistakes that happen that no one catches that trip businesses up. The major benefits to outsourcing payroll are:
1. Accuracy and compliance
Payroll mistakes can cost both time and money. In a New York Times article, “Should You Keep Your Payroll In-House or outsource it?” the argument for outsourcing payroll is that having payroll automated by a third party eliminates the inaccuracies that occur when compliance issues are discovered. The main argument for outsourcing payroll is that small businesses haven’t the time or the information to keep up with the many government regulations out there.
2. Time Savings
The average time spent on payroll and administrative tasks vary from business to business. Small businesses cite that bookkeepers on average spend between 3 to 5 hours a month on in-house payroll. The burden of complying with complex regulations and compliance issues is what causes the most headaches.An Accounting Today article, states 26 percent of the small business owners polled by SCORE cited that time restraints and compliance issues were the worst part of running a business. Outsourcing payroll saves businesses time so they can concentrate on their core business.
3. Technology and Knowledge
This is an important key factor when considering outsourcing payroll. Third Party Payroll Companies have the latest technology to enhance your financial processes. Many of these vendors also have financial knowledge that could help your business grow financially. One of the drawbacks of having an in-house payroll is that fact that your bookkeeper or accountant may decide to leave the company and take his financial knowledge with him. With an outsourced payroll, there is no worry that your company will be left in the lurch.
4. Long term cost savings
Cost savings over time is what most small businesses need to think about when considering outsourcing payroll. The long term benefits of outsourcing payroll to an outside organization add up when you consider the expense of maintaining an in-house bookkeeper and the risk of paying for payroll mistakes.