For many businesses, salaries and wages are one of the biggest overheads. Managing this non-core aspect of the business can be time consuming and complicated. If salaries and wages are not processed on time, it can negatively impact staff morale and create the impression that the company is not financially stable. Staying on top of your payroll obligation to employees and SARS can be a headache. This is why more and more businesses are choosing to outsource their payroll processing to professional payroll administrators.
Top 10 Reasons Why Outsourcing Your Payroll Is The Smart Choice
1. Increased Security
Do you have the time and energy to closely supervise your business’s payroll for time and rate abuses and other shady activities? Most payroll bureaux have technologies that can spot and alert clients to various types of payroll fraud, such as payment manipulation and ‘ghost employees’.
Payroll processing is quite complex a process which involves loads of monitoring due to inherent risks involved. Theft of personal information can cost you a fortune. Even if your employees are trustworthy, it requires extensive monitoring and security.
Without appropriate measures of security, tampering with company information and abstraction of funds may come about which again can incur pretty heavy losses. Hence, outsourcing payroll function to a vendor is a smart move to make.
It can be embarrassing and detrimental to morale if the wrong eyes fall on the wrong payroll information. By outsourcing your payroll, sensitive and confidential payroll data is calculated off-site, so there is little chance of a breach in confidentiality.
The recent introduction of PoPI (The Protection of Personal Information Act) requires companies to conduct themselves in a responsible manner when collecting, processing, storing and sharing employees’ personal information by holding them accountable, should they abuse or compromise any personal information. Payroll is often the most confidential information of an organisation and it has to be secured in a PoPI compliant manner.
2. Save Time
As payroll service providers are specialists, they can process even the most complex payrolls at a great speed, providing a quick turnaround time on your payroll when required.
One of the major challenges to in-house payroll processors is simply the amount of time it takes to complete and the inability to find much in the way of efficiency. If you handle your payroll in-house, you know that it requires a lot of time and attention to detail. That demand on your time increases as your staff grows. Each pay period becomes a series of checks and balances to ensure no errors are made while handling a considerable amount of data that varies from employee to employee.
That is time taken away from the core tasks that help you manage and grow your business. When you outsource your payroll, you immediately free up all that time. You can devote that free time to refining and improving workflow efficiencies. The inability to relinquish control, and the failure to delegate tasks to better manage your time is a bad business habit you need to give up.
Outsourcing payroll accounting to a professional firm unburdens you from worrying about these time-consuming tasks requiring 100% precision. It also frees up your HR department’s time which can be utilized for core functions which are strategically more important for your business.
3. Compliance – Avoid Costly Penalties And Filing Worries
Each year numerous small and big businesses end up paying heavy SARS penalties.
Payroll providers stay on top of changing government regulations so employers don’t have to and will often take the lead in filing all paperwork necessary for compliance.
Payroll experts stay current with the ever-changing tax rules and regulations, so you do not have to. When you choose to outsource, you won’t have to worry about filing payroll tax-related paperwork. Trained professionals can handle all the calculations, direct deposits and SARS tax payments according to the latest rules and regulations, so you do not have to worry about penalties for paying your taxes late.
These value-add services enable you to focus on real business functions like business development, marketing and product research.
With a professional payroll partner, the payroll function goes as planned every single month. Reporting to the authorities is taken care of, and you are notified when you as a manager have to do something.
Contact us to get an offer for payroll services.
4. Cost
Outsourcing payroll leads to a saving of costs, because it involves specialists without increasing the payroll
itself. The fact is, payroll management represents a cost for the company in terms of the staff assigned to perform these functions. When a payroll company is sub-contracted, fixed costs become variable costs.
A constant question for business owners is whether they have the latest version of their payroll software and the most recent tax tables installed on their computer. Using the wrong tax tables can result in stiff penalties. Paying a maintenance fee and having to upgrade software is a fixed cost ongoing. Outsourcing payroll removes those costs / headaches and keeps payroll running smoothly.
By outsourcing the monthly payroll functions, you could save a full FTE (full-time employee) from headcount.
This resource could be better utilised in other areas of the business like sales or customer service. Or you
could just absorb the additional savings.
As a business you can save several precious Rands by outsourcing your payroll function. This is particularly true if you happen to be a small or medium sized enterprise. Established enterprises with a larger work-force can afford to have an in-house payroll department, but if you are a small business with limited resources and
small work-force, you must seriously consider outsourcing your payroll function to a professional and reputed payroll service provider.
Big businesses can afford to maintain big payroll departments. For small businesses however, an in-house
payroll service is a money burner. If you calculate the hours your employees spend on payroll-related activities, plus payroll software costs, training costs, printers, printing and distributing payslips, creating tax documents etc, you could be surprised by the result when you compare that amount to the cost a payroll service provider can offer. Since time is money, as a small business owner or start-up, it’s costlier for you. This is the reason that many small and middle sized businesses make a smart move by outsourcing their payroll function to a payroll firm.
5. Eliminate Guesswork
Payroll providers automate many of the labour-intensive aspects of payroll, thereby reducing the mistakes that commonly result from manual calculations and data entry.
It can often be expensive to employ staff with the necessary training to operate a payroll system. For smaller companies where the payroll role is not enough to warrant a full-time employee, you may have to use your current staff to train in payroll as an additional responsibility to their core role. Your payroll staff will also need to keep up to date with the latest tax procedures and legislation.
Therefore, it is wise to outsource payroll to someone who works with this full time: A payroll specialist has the insight and experience to deal with small and large issues.
Most payroll providers can give you a wide selection of payroll reports and everything you need to see to run a clean and concise payroll. You will even get a completed payroll journal entry, listing all your debits and credits. There is no guesswork! Get all your payroll information in concise, easy-to-understand formats. For your convenience, you will even have access to your electronic payroll data, fully downloadable into
Microsoft Excel & PDF.
6. Improve Accuracy
Payroll mistakes can be painful, upsetting and stressful. A good payroll service provider is far less likely to
make a serious error than your in-house staff, as you are paying them for their expertise, knowledge and finely-tuned checking procedures they have in place.
7. Reliability
In-house payroll activities function as reliably as the people doing the work. With a payroll service, output, speed and quality won’t vary in accordance with holidays and sickness. There is always a risk that you may lose one of the key members of staff that deal with your payroll and all their knowledge walks away with them. If this happens you could find it extremely difficult to replace them, causing a logistical nightmare come payday. You also won’t have to spend time training new staff or helping them to understand your business’s payroll system.
8. Flexibility
Many payroll bureaux can offer small and medium sized business total payroll packages in which all your
payroll requirements can be met. With outsourced solutions, these packages are often flexible to meet your specific business model so you don’t end up paying for something that includes services you don’t need or misses key features that you do need.
9. Experience
Certain types of employment can lead to complicated payroll structures or scenarios. It pays to have a wealth of experience at your disposal which is something you are unlikely to have with a small in-house
payroll department. A good payroll service provider will know all the ins and outs of payroll-related tax laws and latest government legislation.
10. Resources
The payroll function can consume a large proportion of your staff resources, especially if the staff in charge of the payroll are not trained specifically to deal with it or have the payroll function as a smaller part of their overall responsibilities. The benefits of outsourcing the payroll include freeing up these resources allowing your staff to concentrate on more essential tasks. You may even be able to reduce your staff’s size. Outsourced functions also give you better scope for expansion of your company with scalable services suited to your business.
- Conclusion
Outsourcing to a payroll service provider can alleviate a lot of the headaches involved with changing industrial relations legislation, payroll calculations and field payroll questions from your employees.
You also have access to comprehensive reports, access to payroll experts while saving time and money.
You will also have peace of mind allowing you to focus on growing your business.
Thousands of companies are turning to outsourcing payroll functions due to the vast array of benefits.
There is no reason why you shouldn’t start looking for a good payroll service provider today!
We are a hassle-free, one-stop professional service provider for all your payroll requirements.
Should you need assistance or would like to find out more about payroll please send an email to hello@depacioli.co.za, and our payroll team will contact you.