Should I Keep Payroll in-House or Outsource It?
Payroll is one of the most time-consuming, and potentially expensive, tasks a small or medium business has. The fact that payroll must be completed on a regular basis means it takes time out of someone’s working day, unless you have a dedicated HR department. And the potential for getting something wrong means the task can be stressful. If you are struggling to get payroll completed on time, every time, you may be wondering about the possibility of outsourcing the task. Is it better to outsource payroll, or find a more efficient way of doing it in-house?
Benefits of Outsourcing Payroll
Unless you have a large company you probably do not have the resources to maintain a dedicated payroll division, meaning payroll services are probably completed by a member of staff who has other responsibilities alongside payroll. There are many reasons to outsource payroll to an external company.
For a start, you get better accuracy and you are assured of complete compliance with the payroll legislation and regulations. It is notoriously easy to make mistakes with payroll, particularly when you are under time constraints. It is easier when you are an expert or you have some experience, but not every business has someone with these skills, which is why outsourcing to experts is a good option.
Businesses that outsource payroll also find that they use the time they would have spent on payroll to do more valuable things that directly win business, or look after customers. Many business leaders find it makes sense to leave finance to the experts.
Also, the cost benefits of outsourcing payroll may not be immediately obvious when you are factoring in the cost of the service, but it makes sense in the long-run – you can spend time on more valuable activities, and you do not have to pay temporary staff or a member of staff to do this job.
Benefits of Keeping Payroll In-House
There are reasons why people keep payroll in-house, mainly because they are a larger company and can dedicate the resources to maintaining a payroll department. Larger companies often use payroll software to do payroll themselves, but this can be expensive to set up and maintain so is not always an option for smaller businesses.
Also, many people do not like giving control away to an external company. However, if this is a worry, you can find payroll companies that are extremely professional and will keep all information confidential, leaving you with little to worry about. Look into the costs of software and payroll services to make sure you are making the right decision for your business.