Many construction companies are now opting to outsource their payroll because of the significant cost savings and increased number of payroll complexities. There are several other benefits in doing this, especially for small-medium sized businesses that don’t necessarily have the resources for an in-house payroll division. Payroll is often one of the first processes that companies choose to outsource.
Here are 5 benefits of outsourcing, so that you can evaluate whether or not it’s a good fit for your company:
1. Save money and resources
It’s often more cost effective for smaller businesses to outsource rather than trying to support a payroll department. This is easy to calculate. Determine how many hours your employees spend entering in and processing payroll and compare this to the cost of outsourcing to a third party payroll service provider. If you have less than 20 employees in office, it makes sense to outsource. The cost to outsource can be less than $4000/year. Save valuable time getting someone else to manage your ROE’s, year-end packages, deduction calculations, remittances, online archiving, T4s, funds summary, journal entries, government remittances, etc. Outsourcing will also give the current employees managing your payroll more time to focus on other tasks including detailed job costing, workflow, approvals and most importantly reporting. Additionally, as your company grows and you take on new employees, you don’t have to increase payroll resources, which yields a significant savings.
2. Increase accuracy
Passing payroll processing off to professionals ensures accuracy. Third party experts handle your payroll from end-to-end, providing payroll best practices and ensure regulatory and legislative compliance, providing you with the knowledge and support necessary to maximize productivity. There’s no need to fret over meeting government guidelines or the consequences of errors. Payroll experts are often much less likely to make mistakes than in-house staff and in the rare case that they do, you can seek restitution. This is an easy way to reach unmatched levels of accuracy and consistency in payroll and reporting.
3. Ensure reliable and timely service
A good payroll service will have the expertise and resources available to quickly manage even large complex payrolls that involve multi state/province, multi-union and multi-occupation. Also, unlike your employees that may become swamped with unrelated work or go on vacation, a payroll service will always meet your payroll deadlines and if for the unlikely reason they don’t, they incur a penalty and are held liable. Cheques and payments are issued just as quickly as they would be in office.
4. Higher Security, Convenience
Worry less about any internal payroll fraud or exploitation. Payroll services follow strict confidentiality laws and also often use powerful software to detect any inconsistencies or possible payment manipulations. You’re also protected from any office politics resulting from the wrong eyes seeing sensitive information. In terms of additional benefits, your employees can enjoy the convenience of receiving electronic pay slips, expense reimbursements via payroll, and electronic W2s (in the U.S.) and T4s (in Canada).
5. Enjoy Flexible, Scalable & Integrated
Third party payroll services are very capable of accommodating massive changes to your payroll processes that could be caused by company growth or down-sizing, something an in-house department probably wouldn’t be outfitted for. Also, with integration to your existing accounting ERP system, it’s easy to process reimbursements, maintain vacation accrual, sick days, banked overtime and streamline reporting. It’s an easy way your company can become very efficient.