According to data from Actionable Research, 75% of CPAs who work with SMBs felt that their clients did not have the necessary expertise to handle the demands of payroll processing. In that same study, 68% said their clients’ time would be better served by outsourcing payroll and focusing on more strategic businesses activities. It stands to reason that organizations that keep payroll in-house probably aren’t as competitive as they could be in the market. Successful, smart companies outsource their payroll, and this is why.
“Outsourcing payroll saves money if the volume exceeds the manpower and the Risk with state and local taxes is mitigated with a company like ADP, Prime Point, Paychex or Ceridian. CSS handles our payroll in-house utilizing GP dynamics because our window to process payroll is very tight. Make the decision that is right for you!” says Sharon Tsao, CMO of Contemporary Staffing Solutions.
Time Savings
Calculating, processing and distributing payroll takes a considerable about of time and resources whether you have a staff of 50 or 5,000. According to one payroll processing firm, companies spend as many as six weeks per year on payroll. What could your internal team do with six extra weeks of time? Freeing up your team to focus on mission-critical activities will ultimately have a positive impact on the bottom line.
Cost Savings
Yes, it costs money to outsource payroll, but it costs a lot more to keep payroll in-house. You can estimate the cost of doing your own payroll by determining how many hours your employees devote to payroll activities and multiply it by their hourly pay rate and the cost of benefits for those hours. Compare that total to the plans offered by third parties, and you’re likely to see a big difference. You never have to worry about your payroll provider calling in sick, having a medical or family emergency that puts payroll processing at risk. You pay the fee and you receive reliable service.
Reduced Liability
Not only is payroll time-consuming, it is also rife with opportunities to make mistakes. Making a mistake in an employee’s paycheck will lead to dissatisfaction and making a mistake in terms of federal, state and local tax regulations could mean major penalties. Missing a reporting deadline or failing to stay on top of rapidly-changing regulations could quickly put you on the wrong side of Uncle Sam. According to the IRS, 40% of US businesses end up owing tax penalties every year. Payroll service providers are committed to providing accurate calculations and timely reporting for tax filing to their clients.
Data Security
Processing payroll requires a great deal of personal information and a great deal of money. There is always the risk of a data security breach as well as identity theft, funds embezzlement or records tampering. Moving payroll off company servers adds an important level of security to the personal data and funds associated with paying employees. Payroll providers offer redundant backup systems, multiple server locations and high-level security protocols to give their clients peace of mind that employee data and company funds will be kept safe.
If your company is seeking top accounting and finance talent who can help you make solid decisions about your payroll operations, or you want to improve your accounting and finance hiring processes, contact the expert accounting and finance recruiters at Contemporary Staffing Solutions today.