by: Sarah Joson
Friday, March 28, 2014 |
Outsourcing has remarkably gone beyond the premise of reducing costs. It is now highly commoditized, a large contributor to the global economy, and a tool that helps address talent shortage in some countries.
There are a lot of processes that are now being procured from service providers (even the ones located overseas) - from manufacturing and information technology services and software to back office processes. Payroll processing is one of the back office functions that is gaining traction in the outsourcing industry.
It frees up valuable time.
Outsourcing payroll processes enables business owners to focus on the core functions. By hiring a third party payroll service provider, they save time in keeping their finances in check, especially the wages and taxes of their employees.
It enables them to access the skills that they need.
Payroll service providers have access to talent that is not readily available domestically - at much lower costs. They can also be easily contacted if an employee needs to discuss something about their account, or changes are needed to be made in their information and status.
Payroll service providers are compliant with standards.
Payroll tax issues are hard to dissect, especially if they’re not in the line of work of the operations manager or business owner. Through outsourcing, reporting and filing to the state and IRS as well as other tasks are done by experts in the field. Some say it’s worth spending on the process for it to be done to a T.
It results to reduced manual errors.
Errors in payroll often result to hefty fines. Apart from having to dedicate time in writing checks, managers need to oversee the payroll taxes, withholdings, insurance, profit-sharing, and 401(k). Outsourcing to service providers ensures minimal manual errors as they use automated tools to perform the tasks.
Significant cost savings
One of the known benefits of outsourcing is cost reduction, and it still holds true. It offers automated processes and allows clients to acquire services in increments.
Mobile (accessible) monitoring
Executives are known to always be on the go and being able to access payroll processes through mobile devices is a huge plus for them.
Compliant with tax withholding protocols
Outsourced payroll processes can work in such a way that the provider will be the one to adjust to the various protocols when it comes to withholding tax, particularly for companies operating globally.