Payroll is a function that can be complex and tedious for many businesses. While they could outsource, many may not want to overpay for a function that doesn’t contribute to their bottom line. However, it would be wise for you to consider outsourcing the function instead of trying to handle things yourself. Just one small error on your part could get you in big trouble and have much more serious consequences than you may imagine. Let’s take a look at some of the pros and cons of outsourcing your payroll function.
Pro – Saves Time
The biggest benefit of working with a payroll service is that it will allow you to save time that can be used on what really matters. You shouldn’t have to waste time calculating deductions and pay and distributing checks to employees and tax authorities. You won’t have to worry about printing pay stubs, and you might even be able to save on these by working with an outsourced payroll provider. Some will have a clock in/out option so you won’t even have to calculate how many hours are owed for a particular pay period.
Con – Some Services May Make Errors
Don’t assume that all payroll service providers are competent. Some will make errors that could end up costing you. If they fail to report and pay taxes in time and accurately, you might still be responsible in the end. Even if the HMRC goes after the payroll service, you might still have to pay an outstanding tax bill in addition to what you paid the service.
You also never know what kind of employees the payroll service is working with. They might have someone on their team who’s actively embezzling funds from clients, for instance. This is why it’s very important that you take your time when looking for a team, and make sure that they have a solid track record. Make sure that you check what others have had to say about them and get as many references as you can.
Pro – Tax Expertise
At the end of the day, chances are you will never have the same expertise as a payroll service. Teams like Azets payroll services, for instance, have over 6,500 partners and specialists working for them spread across 15 different business sectors. Working with a team like this will ensure that you stay compliant at all times, and they will be ready to back their work as well.
It’s easy for you to make a small omission, but even the slightest one could mean that you may have to deal with administrative issues, missed paydays, or compliances fines. Small issues can start to snowball and become major in the end. This is something you’ll be able to avoid when working with a reputable payroll service.
Con – Can Get Expensive Quickly
One thing to note with outsourced payroll services is that clients often end up paying for services they don’t need. Many services will try to upsell their clients to their top packages knowing full well that they won’t need it. Some services may become redundant as well if you’re already working with an accountant. This is why you must know exactly what you need from a payroll service before you start your search so that you won’t get swayed by these types of sales pitches.
Now that you know a bit more about the pros and cons of working with a payroll service, you can start looking at your options. Make sure to evaluate your needs first and work with someone you can trust.