Enterprises that have a sizeable workforce will find it imperative to implement some kind of payroll solution. However, outsourcing payroll may be a better option when one considers the various aspects involved.
Outsourcing payroll services to payroll companies brings a major benefit of timely completion of the monthly payroll. Enterprises with 100 plus employees particularly benefit from outsourcing since companies that handle payroll have staff and IT resources to handle any complicted payroll process.
Accuracy and compliances
Payroll is not just calculation of monthly salaries to employees. There are legal and tax compliances that must be handled in a timely manner with no margin for errors since errors of omission or commission could invite legal notices and penalties. Each employee’s calculation may be affected by factors such as loan availed, leave, basis of calculation of salary, extra remuneration. Laws applicable to employees and employers may vary from time to time and only companies that have legal cell to handle such latest amendments can ensure accuracy and full compliances. Income tax must be deducted at source and a return filed periodically. PF/EPF needs to be deducted, the appropriate forms filled in and filed with the authorities. There are similar other compliances to take care of. Legal experts and labour laws experts also guide clients on best practices, avoiding pitfalls and on other regulatory matters.
Payroll services have expertise and experience to complete the process each month in time and this leads to employee satisfaction. Further, payroll companies put in place an employee portal that gives information about salary, taxes and deductions through self service. Since payroll calculation is accurate, there is no room for dissatisfaction that errors in calculations cause. Employees receive salaries in time and it keeps them satisfied. Satisfied employees work with dedication and commitment. This in turn contributes to the company’s productivity and competitiveness.
Payroll is linked with employees. Employees are the best assets of a company. Happy and satisfied employees will be grateful and they will do all they can to improve company’s competitiveness. This means outsourcing payroll can actually cost you next to nothing. You pay for payroll outsourcing from increased revenues. The company’s image improves and it can attract top talent that will help it rise to greater levels. From another perspective, when a company outsources payroll it saves on cost of salaries paid to employees and costs of IT infrastructure. There are all round gains.
Employees in the HR section are likely to leave and new employees will take time to understand the process. This could cause discordance and discontinuity in efficient payroll management. Outsource payroll and you are assured of continuity since it is the payroll company’s responsibility and they will always have employees who know about the payroll process.
Reports, analytics, performance
This is one aspect that could make the biggest difference. In-house HR employees handling payroll may not be able to derive statistics and give analytics on performance. Payroll companies handling the process will give a detailed analytical report to help management derive insights. They get information about each employee’s performance and his pay. Management can take informed decisions that could lead to better employee performance and satisfaction besides helping to reduce payroll burden.
There is always room for optimization in any process. Payroll is a crucial process and companies offering payroll services can do it much better and in a shorter time. If you were to hire experts with similar capabilities you would incur high costs just for advice. Outsource the process and you get work done besides receiving advice from top experts for free.
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