Crowd-sourcing, subcontracting, off-shoring, outsourcing:
No matter what you call it, the process of collaborating with an outside firm
is here to stay. Outsourcing is cost-effective and simple. When done properly, it instantly upgrades your company’s core competencies and service capabilities.
However, how does an enterprise go about easing into the process of granting
operational responsibilities to another company?
Payroll Outsourcing: The Perfect Introduction to Subcontracting
In order to answer that aforementioned question, think of payroll software. Most, if not all, of today’s companies rely upon a payroll software. Some companies decide to outsource their entire payroll needs to full-time compensation management professionals. Manually managing payroll in-house requires a substantial investment of time and capital. It's a portion of your operations never to be ignored. If mismanaged, it can easily cost your company valuable profit.
One of the biggest issues businesses face is when they use a subcontractor and then see their service capabilities decline. Granted, outsourcing reduces costs, but it's often hard to find a company willing and able to take on the responsibility of managing a portion of your company's operations as if it were there own. This is why you need a business function you can afford to outsource: Payroll is the perfect place to start. So, what are some of the immediate benefits of using a payroll software?
1. Cost Reduction
Payroll outsourcing not only reduces costs, but it’s also incredibly inexpensive as a standalone service. Today’s firms have multiple payment options: Companies can use cloud-based payroll services that charge an affordable monthly rate, rely upon an in-house software, or simply sign a yearly contract with an outside firm. Regardless of what option you choose, you'll reduce a significant portion of your company's costs.
2. Eliminate Manual Processes:
Relying upon a software all but eliminates manual payroll processes by doing away with time-consuming timesheets. These manual processes have costs and they can be measured in time, data entry and key entry errors, and most importantly, improperly completed W-2 forms. Imagine just how upset your employees will get when they’ve suddenly realized your company hasn’t properly accounted for deductions! Nothing concerns employees more than issues pertaining to their paycheck. A software operates in real-time and allows your company to complete W-2 forms electronically.
3. Reduces Your Tax Burden:
Outsourcing payroll can help you reduce your tax burden. In fact, according to the IRS, nearly 50% of today’s businesses face a yearly fine for improperly filing their taxes. This is a cost that goes directly to your enterprise’s bottom line. Just think about how hard it is to generate a profit in today's economy. That should be motivation enough.
4. Firms are Compensation Experts
Today's firms are experts in compensation management. It’s their job to remain up-to-date with the most recent government regulations, tax codes and labor laws. They can help your company manage compensation for all employees, give you invaluable insight into salary ranges, and most importantly, provide insight into the latest employment trends. In addition, a number of software platforms providing critical accounting support.
Like all subcontracting work, outsourcing payroll means a company can all but eliminate what would otherwise be a timely endeavor. It’s the best place to start with subcontracting because it allows you to hand over responsibilities for an important function, while not handing over the keys to your company’s future. You can assess the software's strengths, develop a process to outsourcing other business functions, and gradually ease into the process of relying upon another entity to improve your company's operations.
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