Before you decide on a payroll vendor, it’s important to understand what your business needs are and what amount of work your payroll team can realistically achieve. To save on costs and gain more control, many small or mid-size businesses typically opt for in-house payroll processing. Whereas larger organizations (4k+ employees) may require more resources to effectively process their payroll. That’s where outsourcing your payroll process can be beneficial and an outsourced payroll vendor may be the right solution for you.
What is outsourced payroll?
When your organization outsources payroll, a vendor handles the entire payroll process for your company. Outsourcing the complexities of payroll to an external party means less legwork for your payroll team. Whether it’s submitting remittances or preparing payroll for year-end, outsourced payroll processing can reduce compliance risk and free time for your team to focus on other business needs.
The benefits of outsourced payroll processing
For large organizations, payroll is a complex, time-consuming process. When left to payroll vendors, outsourced payroll presents a few benefits:
Less reliant on internal staff
With an outsourced vendor, your organization requires less staff for managing payroll. Instead of an internal department doing the majority of the legwork, your outsourced vendor takes care of the details.
And in case of vacation, illness, or new hires, you likely won’t lose time or miss payroll with an outsourced provider. If you experience turnover in your payroll department, outsourcing payroll provides stability and reliability.
No technology upkeep
When you outsource your payroll, you don’t have to maintain in-house software which may mean less work for your IT department. It’s your provider's responsibility to ensure they’re keeping up with current technological trends and the most recent legislative changes. If considering an outsourced provider, be sure to ask about their innovation initiatives and if they continuously improve their products.
Reduced risk of non-compliance
Ensuring compliance is one of the most vital aspects of payroll. With a dedicated team taking care of payroll remittances and submitting them on time, keeping track of government regulations, and preparing year-end documents, compliance is better assured.
Get time back
For every pay period, payroll departments are required to input data and double-check for payroll errors. With outsourcing, employers only need to approve time and any other adjustments for each pay period. With data entry tasks and errors under control, your employees have more time on their hands to up their productivity and focus on meeting the strategic needs of the business. Outsourcing payroll frees up HR or accounting personnel to work on strategic tasks.
Want to learn more about In-House vs. Outsourced Payroll Processing?
At Avanti, we develop highly configurable in-house Payroll tools to help mid-size businesses manage, integrate, and automate their payroll practices. Easily make changes, run your own reports and get access to everything you need when you need it.
For more information, check out The Benefits of In-House Payroll Processing.