It is the start of a new month. A day or two have passed. Your employees have not yet been paid. The usual cheerfulness and morning chats are no longer there. It is not a secret that the quality of work done by your employees is directly related to how happy they are. Today they are not.
Paying employees on time is therefore very important to have happy employees with high productivity. Payroll management is essential yet entails a lot of work. Having a competent one will save you a lot of time and resources. Payroll has also evolved from just being payslip processing. This means that it is more than just paying employees on time. There is the aspect of keeping up with current laws and regulations, managing taxes and withholdings.
While they are essential to the business, payroll and tax responsibilities are time-consuming hence many business owners prefer to outsource them. This obvious reason helps them free up resources to focus on their core functions but what are other benefits of outsourcing your payroll?
Minimize Payroll Mistakes
Your employee has been reporting daily to work on time and very productive. At the end of the month, they receive a half salary. This is not because you couldn’t pay them all their dues but simply because your bookkeeper did not get the calculations right. Do you think the employee will be happy?
Payroll errors and mistakes have costly effects on both employees and employers. Pay Rates, missed hours or days if done incorrectly will reduce employee pay. This mistake could negatively affect employee productivity and can lead to a strained relationship between the employee and the employer.
Mistakes on the payroll on the part of the employer can lead to penalties and audits. In the case of wrongly calculated tax obligations, an employer is liable to fines by the government. While business owners are not experts in the complicated world of taxes, it is unfortunate that they are legally responsible for failure to correctly represent tax reports.
Looking at the above cases, payroll processing is complicated and prone to mistakes hence doing payroll on your own can cost you more than what you intend to save. It is therefore advisable for you to look for experts by outsourcing your payroll.
Data Privacy and Confidentiality
Your company server is the central storage of communication happening within your company which means basically all your employees have access to it. Therefore, the big question is, how secure are your employee data and payment data on the company’s server?
Payroll processing is a delicate operation for the company and even if you may trust your inhouse accountant or bookkeeper, there is usually a big probability of information getting into the wrong hands. Such critical information in the wrong hands could lead to identity theft, misuse of company funds or messed company record by employees with a motive for personal gain.
While you focus on the core functions of the business, you might not have all the time to monitor for any unethical activities on your payroll. If advanced, your payroll service could be equipped to warn you in case of payroll fraud.
To solve this, business owners are advised to outsource payroll to a stable service provider in order to protect their data and have an extra backup just in case it is needed.
Deal with The Experts
Last week, there was legislation on background checking by the Government. Did you know? While we may be known as experts in recruitment and staffing, we do not expect your inhouse hiring managers to be conversant with it. The same applies to payroll processing. Payroll Outsourcing providers employ experts who understand the inside and outside of payroll processing.
They understand compliance and tax laws and the ever-changing world of regulations. Business owners and payroll related staff do not have enough time to constantly study the ever-changing regulations as they need to focus on their business’s core functions. By outsourcing, small businesses for example get to access an expert who would otherwise be available only to large businesses.
These experts are also knowledgeable in verifying the accuracy of your data, finding mistakes and correcting them and this will save you issues like fines and penalties.
Avoiding Unnecessary Costs
Imagine your bookkeeper has been using outdated payroll processing software for the past 6 months. This automatically means that you have not been filling in the right taxes. You are now liable to fines.
Printing payslips requires you to have software. This software will require constant updates to keep payroll processing running smoothly. This isn’t a task small business would like to endure. Therefore, outsourcing will save you such headaches.
The benefits of outsourcing your payroll are many but even if one of the above applies to your organization, then it is time for you to consider outsourcing your payroll. There are many options available and this depends on your criteria of what to consider when choosing a payroll outsourcing provider.
At Gap Recruitment Services Limited, our Payroll Outsourcing Service guarantees you timely processing of employee salary, remittance of standard statutory deductions, privacy and confidentiality of your employee and pay data among many other benefits. Write to us at firstname.lastname@example.org or call us on +254 715 155 512.