Are you considering outsourcing your payroll?
We get it. You're looking for ways to cut costs, and payroll is a huge expense. It's tempting to try to handle payroll in-house, but here's the thing: you might be making some assumptions about what it means to outsource your payroll that could be keeping you from making the right decision for your business. It is a well-known fact that the payroll outsourcing industry is thriving. More and more companies are taking advantage of the benefits that come from outsourcing their payroll needs, but there are some common misconceptions that many people still have.
Here are the Five most common misconceptions about outsourcing payroll services and how they can be addressed:
“Only large businesses can afford to outsource payroll.”
Fallacy. As the trend of outsourcing payroll continuously develops, even the top payroll outsourcing companies are addressing the needs of the small business sector. Even if you have less than 10 employees, don’t get intimidated by hearsay; take time to research and get those free consultations with your potential payroll providers to get a better view of their fees and processes. You’ll be surprised that a number of well-known vendors offer competitive pricing for small businesses, which could equate to something even lower than the salary of an in-house employee in charge of payroll.
“The payroll outsourcing setup is too complicated.”
Payroll services providers follow a standard onboarding and setup procedure, which means that they will prompt you in advance for all the required documents for transitioning your payroll to them, and they will work behind the scenes before making your system live. It will require only a bit of your time which will pay off greatly, in terms of the amount of time and money that you can save in the long run.
“Payroll outsourcing means you lose full control of your payroll activities.”
Don’t think that outsourcing your payroll equates to just another business transaction. Think of your potential payroll provider as a partner, to help you out in streamlining your payroll functions. With the personalized reports that your vendor provides you with, you still have full access and control over your payroll data. You may still cut checks as long as you inform your payroll provider to have it properly accounted for.
“Payroll outsourcing providers only offer generic solutions.”
The only time you’ll know when the payroll provider is right for you is when it allows you to modify the payroll solutions that it offers to fit the requirements of the current phase of your business. Generic, “one-size-fits-all” payroll strategies will never work as every business is unique. The payroll provider should fully understand the nature of your business and shall work with you to customize a solution that will fit your budget and requirements adequately.
“Payroll outsourcing makes you susceptible to leakage of sensitive information.”
Entrusting your payroll activities to trustworthy payroll providers can even be more advantageous for you, in the sense that it can avoid employee fraud. Doing it in-house means that your payroll information is exposed to several members of your organization who have access to these payroll numbers.
Thus, it isn’t uncommon for employees to connive in committing falsified wages by manipulating pay rates, commission schemes, or payroll software. Some might even create ghost employees and have that money deposited into their own accounts. Having your payroll outsourced means that only you, the employer, will have access to your sensitive payroll figures. Concurrently, your employees might be allowed to access their timesheets and pay slips online but of course, with limited access that they couldn’t hack their way into.
Get More Time to Focus on Your Core Business
As the world around us changes, the way we do business must change as well. The best way to stay ahead of the curve is to keep up with your employee's needs and provide them with a positive and fulfilling experience. One way to do this is through process innovation, which involves rethinking how you do things in order to ensure that your staff is getting the support they need.
Many businesses (large or small) continue to do payroll in-house because they're unaware of the benefits of outsourcing. If you want a new way to increase your company's productivity and profitability
it's time that you decide for yourself and deciphers how a process innovation like payroll outsourcing can help you make better use of your time and money.
Let D&V Philippines set the record straight. Get a Free Consultation With Our Payroll Specialists and see how we make payroll easier for businesses in Australia.
This post was first published on 02 August 2016 and updated 28 November 2022. Edited by: Angelica Garcia