Why outsourcing payroll makes sense

Change remains a challenge for business owners. Considering outsourcing payroll is no exception. Here are some of the most common reasons business owners and managers choose to outsource payroll.

Consistency. As business owners are well aware, “in-house” bookkeepers tend to come and go. When you outsource payroll processing, you give yourself a “safety net.” Of all the bookkeeping and accounting functions that have to be performed by a business, payroll and payroll taxes are the ones that are absolutely inflexible. If something happens to your in-house person — sickness, accident, a family matter or they just walk out — you can put off your basic bookkeeping until next week. Payroll, however, won’t wait. Our friendly taxing agencies aren’t very forgiving if you miss a payroll tax payment, either. In many cases, a single tax penalty will exceed the cost of outsourcing payroll for an entire year. When you outsource payroll, the service takes on the responsibility for making tax payments on time.

Expertise. Here’s a good question to ask about payroll: Are the people who process my payroll up to date on compliance issues? This is a very different question from: Can my person print a paycheck? State and federal governments enact new labor and payroll laws with great frequency. Between May and June 2010, six new federal laws became effective. There were at least that many Colorado laws in 2010 that affect employers. The cycle of new laws has continued in 2011. Do you know what they are? Do you have the means to find out? They might not apply to your business. But as the old saying goes, “Ignorance of the law is not an excuse.” You should know what laws apply or at least have an easy-to use-tool that gives you access to changing labor and tax laws. Wouldn’t you like to know you’re compliant rather than just hope you are?

Saving time and money. While cost is seldom the first question asked in conversations about outsourcing, it’s an important one. In many cases, when all the costs a business incurs in processing payroll are tallied, outsourcing can save money. The other thing that happens is that the time spent in the payroll process is greatly reduced. This frees up employees for more valuable tasks. If a time management system is implemented where there was none, the savings involved often exceed the fees by several times.

Help when you need it. Do you remember the television commercial a couple of years ago that showed a guy trying to get his taxes done. He was pulling his hair out trying to figure out a problem and the “box” didn’t have the answers. His wife, who had wanted him to use a tax preparer, picks up the box and knocks him on the head with it, saying “Talk to the box, honey.” The advantage of outsourcing locally is that when you have a question or problem, you can call a real person or even visit with them in person.

Considering the various reasons to outsource payroll, it could make sense for your business.

John Hildebrand serves as president of business development for Autopaychecks at 441 Colorado Ave. in Grand Junction. Autopaychecks offers a range of payroll and human resource services and tools. Reach Autopaychecks at 245-4244 or visit the website located at www.autopaychecks.com.
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Posted by on Jun 1 2011. Filed under Contributors. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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