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June 15, 2022
Business owners that want to save time and money take advantage of outsourcing payroll to professional payroll service providers. By partnering with companies that provide dedicated payroll management, businesses forego the need to invest in in-house payroll operations. There are several benefits to doing so, and we discuss how you can outsource payroll for greater efficiency and profitability.
How Does Payroll Outsourcing Work?
Payroll outsourcing involves delegating payroll management tasks to third-party companies. Payroll service providers that handle these tasks can assist with but are not limited to, the following responsibilities:
- Developing an accurate outline of employee pay (including benefits and reimbursements)
- Determining payroll tax deductions
- Making additional employee deductions (including retirement funds)
- Processing the payroll of all employees
- Facilitating payroll tax filing
- Collecting and organizing payroll data and information
For small businesses, having professionals dedicated to fulfilling these responsibilities is incredibly beneficial. Business owners do not have to worry about familiarising themselves with some of the more complex procedures in this process.
For medium to large enterprises, the completion of these tasks by a payroll service provider can free up time and resources to allocate to other areas of business. This promotes efficiency and can save on costly in-house employee salaries.
Benefits of Outsourcing Payroll: The Pros
We have touched on several benefits that make outsourcing payroll an appealing prospect for modern small, medium, and large businesses. Below, we list the most impactful benefits of outsourcing your payroll in more detail:
Saves Your Business Time
Arguably one of the most beneficial aspects of payroll outsourcing is that it saves businesses time. Instead of having to allocate employee time to facilitating the necessary payroll procedures, business owners can relay the responsibilities to third-party companies with teams dedicated to fulling payroll management. Payroll service providers mitigate the need to invest heavily in in-house management, ensuring that payroll is also serviced more efficiently.
Saves Your Business Money
Upfront costs of outsourcing payroll may seem high, but the long-term cost-saving potential of partnering with a payroll service provider is massive. Instead of having to pay multiple employees that service in-house payroll management, business owners can invest in companies dedicated to fulfilling these procedures. The best payroll service providers offer competitive packages that reduce the investment in completing payroll in time.
Eliminates Payroll Errors
Payroll providers assign teams of professionals to client portfolios, ensuring that each client is serviced with meticulous attention to detail. Dedicated payroll teams with expert knowledge are often more precise when it comes to payroll than in-house teams. This is because they have years of experience dealing with payroll and the nuances of the job. They can reduce the potential errors within payroll, saving business owners the headaches of having to resolve time-consuming issues within the system.
Ensures Payroll Compliance and Security
Payroll providers are also clued up on the latest payroll legislation, ensuring that clients’ payroll portfolios are compliant at every step of the management process. Working with innovative payroll systems, like Sage, and following guidelines outlined by SARS, these service providers can give business owners peace of mind when it comes to payroll. Furthermore, payroll service providers ensure secure and confidential data organisation and reporting to keep your business's valuable information safe.
Disadvantages of Outsourcing Payroll: The Cons
As with all operational strategies, there are a few disadvantages of outsourcing payroll. Bear in mind that these disadvantages can be navigated, avoided, or eliminated by partnering with the best payroll service providers.
- Integrating new payroll systems by partnering with a service provider involves an onboarding process. This enables payroll providers to understand your unique business operations. This can take time, however, the best providers can deliver innovative payroll systems via a streamlined and efficient onboarding process.
- Partnering with a payroll provider requires business owners to put their trust in the third-party company. This can be daunting, however, the best payroll service providers are knowledgeable, providing excellent solutions and comprehensive compliance with payroll legislation. Furthermore, they provide ongoing support for peace of mind.
- At times, you may need to access your business's payroll information. This can take time if it sits with a payroll service provider. Fortunately, the best payroll service providers offer round-the-clock support for on-demand access to pertinent information. They may also utilize top-class data recovery systems to secure your payroll assets.
We recommend considering how your preferred payroll partner can respond to and do away with these disadvantages by providing the additional value outlined in these points.
How Stratogo’s Payroll Services Can Help Your Business
Stratogo is a leading provider of outsourced payroll services that delivers some of the most comprehensive and cost-effective packages for businesses. The long and growing list of payroll partners in Stratogo’s portfolio enjoys professional support tailored to their unique business operations, secure and confidential services, and affordable suites that deliver precise results. You too can enjoy the benefits of outsourcing payroll to Stratogo. Simply complete our Payroll Form and a representative from our team will be in touch.
