What Is Payroll Outsourcing?
In order to save time, money and effort, business entities hire an external firm so that they can look into the payroll functions of the hiring entity. Outsourced payroll solutions turn out to be more accurate as compared to the in-house results as it gets analyzed, evaluated and prepared by professionals. The key factor here is that payroll speaks about how a business entity rewards and retains its employees. To get a clearer idea, let’s have a look at the payroll outsourcing service in the UAE, followed by its benefits.
Benefits of Payroll Outsourcing
The benefits of payroll outsourcing are briefed below:
1. Saves Time
Professionals who are involved in delivering payroll services would consume less time as compared to untrained employees trying to maintain the payroll records.
2. The Overhead Costs Get Reduced
Training the in-house employees to maintain the payroll books and then proceeding ahead involves heavy cost. So, the best option turns out to outsource the payroll books.
3. Improved Data Security
The amount of risk that exists in-house is way more as compared to the payroll professional firms.
4. Guaranteed Government Compliance
Professionals do take completely the books as per the legal rules and always have updated knowledge.
5. Access to Multiple Services
Professional payroll service providers do have multiple additional services as they are specialized in the respective domain.
Manage Your Risk Better
Payroll processing for small businesses is not a very easy job if you venture into the harsh compliance requirements, as well as the legal hurdles that are expected from duly registered business enterprises. In fact, even a tiny misclassification or inadvertent error can result in a massive fine. Taking it further, mistakes in payroll processing can lead to serious class action lawsuits, fines, penalties, and in extreme cases, even jail time. This is precisely why even large companies sometimes outsource their payroll and accounting processing so that they can minimize their risk.
When you have highly experienced and dedicated experts who are suitably well-versed in all the latest payroll service companies for small businesses, then you can rest assured that you will make fewer mistakes, and your propensity for erroneous payroll processing will also go down substantially. In the long run, the smooth and consistent disbursement of payroll will keep your employees happy (which in itself is a significant advantage of outsourcing your payroll process). Furthermore, it will also get the government as well as the legal system off your back so that you can concentrate on the crucial task of expanding your brand new business.
Make Payroll Services Work for Your Business
Payroll is an important consideration for every business that has employees. Outsourcing payroll services can sometimes make it easier for businesses to focus on other important organizational matters and enjoy peace of mind, as payroll needs are taken care of. Payroll errors and compliance issues can cost money and damage employee perceptions of the company.
When selecting payroll services, however, it is not enough to simply consider paychecks and choose the lowest priced service. Other important factors, such as visibility, payment options, and reliability of the company should also be considered. By considering the following points, you can make payroll services work for your company.
Does Your Internal Payroll Burn Resources?
If your organization does not have an efficient internal payroll solution, it can waste countless labor hours. If there are no employees that specialize in accounting or have a broad range of knowledge regarding different accounting issues, it can spell disaster. If outsourcing payroll services will relieve your company of a largely time consuming burden, it may be time to consider doing so.
Do You Know All That You Need to Know About Compliance?
Federal, state, and local laws regarding payroll and labor can be difficult to keep up with. Trying to manage a business and keep up with compliance changes and needs can be taxing. Doing so may also increase the likelihood of errors. While some payroll software will help keep track of regulatory changes, a payroll service will take responsibility for making sure that your company stays compliant with laws.
Are There Different Payment Options?
Paper checks are not environmentally friendly, can waste employee time, and sometimes even hamper productivity. To make payroll services work well, you should make sure that the payroll option selected offers different ways for employees to get paid. Many payroll services offer these options and many in-house options do as well; it is important to take this into consideration when reviewing companies that offer either service.
What About Employee Self-Service?
Employee self-service is beginning to be viewed as a necessity, rather than an added bonus. More and more, employees expect that they are able to readily access their paycheck information remotely on their own time. If employee self-service is not available as an option with a payroll service, or is difficult to integrate with other HRIS employee self-service options, it may be worth considering a different company or different payroll solution.
What a Payroll Company Does
As a payroll services provider, your company is responsible for handling records on employee wages, deductions, hours worked and pretty much everything else related to compensation for your clients. It’s your job to translate all that information into paychecks or direct deposits for each employee.
You can choose to specialize in a particular area of payroll services, which might help your business cater to niche markets, but it is likely that your processors will need to be able to handle a large number of payroll-related services, including:
- Pay adjustments
- Processing federal and state income tax
- Computing time and wages
- Issuing manual checks
- Voiding checks
- Direct deposits
- Benefits administration
- Compilations services
- Wage garnishments
Too many companies use an Excel spreadsheet or other manual method to process payroll.
By using an outside company, the business representative simply logs on to the outsourcing payroll services’ portal and approves salary or hourly timesheets every few weeks.
The solution provider processes the appropriate deductions and either sends the direct deposits to employees or issues the checks automatically. While the business enters the employee hours or pay rates, the solution provider keeps track of the changing tax rules or other deductions.
By using financial partners to outsource your payroll, this information can automatically be downloaded to your accounting system for easy integration into your financial statements.
Easy Access for Employees
It should be no surprise that employees have a lot of questions around payroll. By using payroll outsourcing services, they can access a portal to get all their answers without taking up company resources. (For example, when they want to know why their final check was a certain amount and question the accuracy of their deductions.)
Trusted financial partners can also keep track of employee sick and vacation time allocations and redemptions so there are less misunderstandings. They will also provide employee W2s by January 31 of each year for employee tax filings.