An expanding organisation outgrows many things over time. This might include working out of your home, printing your own adverts, and handling your own payroll processing. You can save a lot of time and energy by handing over your payroll to a trusted partner.
Once you’re large enough, you may be able to create an entire in-house payroll department. But what about that stage where you don’t have the resources for full-time payroll staff but can’t keep asking executives to cut cheques? You outsource payroll.
Let’s talk about the benefits of outsourcing your payroll service, and what virtual bookkeeping for professional services looks like in practice. Spoiler: tax time will be easier.
How Does Payroll Outsourcing Work?
Before you entrust someone else to run payroll for your business, you want to know what they can handle. A virtual bookkeeping service may be your best option. You’ll have access to an experienced team that can tailor their services to your exact needs.
When you outsource payroll, you’ll either give your contractor access to your payroll software or allow them to set it up for you. You’ll never have to worry about late paychecks again.
Which services do payroll outsourcing providers offer?
It’s easy for a payroll period to sneak up on you. And if you enter tax information incorrectly, both you and your employee could be in some trouble at the end of the year. When you hand over payroll to a partner, they can:
- Make sure the correct taxes are taken out. You and your employee will appreciate an accurate accounting of payroll taxes when it’s time to lodge your returns.
- Get forms signed. When a new employee comes on board, it’s important to get their documents sorted promptly and correctly. Your outsourced payroll partner can tackle these details.
- Handle benefits. If your employee takes a sick day or paid time off, you can trust your virtual payroll service to properly note it.
- Track time. If your staff are required to track their time throughout the week, a payroll service can handle it. Then, they translate the hours to the appropriate paycheck.
- Send funds. Perhaps most importantly, your payroll source can become accounts payable, ensuring that all employees are paid on time each pay period. You won’t have to rush to send off direct deposit money or paper cheques again.
Benefits of Outsourcing Your Payroll Process
There are many reasons to outsource payroll. Maybe you’re just not great with numbers or you are becoming overwhelmed with other aspects of your business. While you’re seeking help with
online bookkeeping, it makes sense to sign up for payroll services. Here are just a few of the benefits.
Save Time and Energy
You will have more time to focus on research and development, marketing, hiring and a host of other vital activities with payroll off your plate. You may not realise just how much of your energy is going toward calculating benefits and dealing with running payroll until you let someone else take over.
Minimize Payroll Mistakes
Payroll mistakes can leave your employees in the lurch — a late payment could mean they can’t pay their bills. On the other hand, overpaying or forgetting to add vacation time could cost your company money. Financial mistakes are never good. What’s more, a mistake that doesn’t get corrected once could continue each pay cycle, including incorrect tax deductions. Leaving payroll to the pros will reduce the number of errors.
Improve Your Data Security
Your employees entrust you with sensitive information, including bank details, when they submit payroll documents. When you outsource payroll you can increase peace of mind. Payroll experts know how to guard important personal data.
Payroll mistakes can get very expensive. So is hiring someone full time, especially if you are still a small-to-medium size business. Paying a contractor may be a more cost effective way to get your payroll done promptly.
Help Filing Payroll Taxes
Your payroll contractor can also ensure that your taxes are lodged the right way. This can mean you avoid fees during tax time and save your employees from explaining why they underpaid. Tax rules change often; you won’t have to stay on top of the tax code when you have an expert on the case.
Payroll assistance also keeps your business compliant with any financial reporting or payroll laws for your industry. Regulatory compliance may be required at the state or national level. Hand it over to your outsourced payroll provide so you don’t have to make heads or tails of complicated compliance rules.
When is it Time to Outsource Payroll?
If any of these signs sound familiar, it may be time to get some help with your payroll.
- You are growing as an organisation. If you’re the founder of a company, it’s natural to outsource services as you scale up.
- You missed a payroll period. If you’ve ever gotten so caught up in other work that you forgot to pay an employee, you should call in reinforcements.
- Your finances are becoming complicated. Whether due to growth or other causes, if your accounts receivable is already keeping you up at night, why not take payroll off your plate?
- You are hiring for the first time. You may have a small trusted group of people in your company for the first several years. As you hire from the outside to add to your team, you should also bring on a payroll pro.
Deciding to outsource payroll is a wise move for many businesses. Whether you are growing as a company or just confused about tax deductions, an outsourced payroll professional will be a lifesaver. You can focus your attention on things like marketing and rest easy knowing your paychecks are going out like clockwork.
A company like Visory will pair you with a team of payroll experts. They will know your industry and allow you to add more services as needed. Before you know it, your outsourced payroll team member will be a trusted extension of your company.