Payroll processing isn’t something that most business owners look forward to. It’s often an arduous and painstaking task that requires a lot of focus to do correctly. One alternative to traditional in-house payroll processing is to hire an HRO service to handle it. Here are some benefits of going this route and how it can improve operations.
Level of Accuracy
Being accurate is extremely important when it comes to payroll. Making mistakes can have some serious repercussions like penalties from the IRS. In fact, according to the IRS, “40 percent of small businesses pay an average penalty of $845 per year for late or incorrect filings and payments.” If something is severely botched, you could incur even bigger penalties that really set your business back. Not to mention, you can end up with some irate employees on your hands when mistakes are made.
Because there are new regulations being introduced every year, payroll keeps becoming more complicated. Fortunately, an HRO consists of highly skilled professionals who understand the process and know all the ins and outs. They know what it takes to be compliant with government regulations and can guarantee a high level of accuracy.
Whether you’ve only got two employees or several dozen, doing payroll is often time consuming. While you or in-house staff members are spending time on it, it means you’re unable to perform other important tasks like working on your marketing campaign and making sales. As a result, it can be a major detriment to productivity and potentially reduce your profit. Using an HRO is ideal because they will take care of everything and free up the time of you and your staff members. That way everyone can focus on more important matters that will benefit your business and help it be more productive.
Save Money on In-house Employees
There is also the issue of cost when it comes to payroll processing. While many larger companies have the budget to take care of this process in-house, smaller companies typically end up paying more than they would by outsourcing. That’s because of all of the activities required to do payroll quickly eat up money and squander employee resources. HR World states “if your business has fewer than 20 employees, there’s a very good chance that you can save money by outsourcing your payroll operations.”
In a day and age where network breaches and information leaks are disturbingly common, you can’t be too careful when it comes to security. If company records and inside information winds up in the wrong hands, it can lead to problems like identity theft, data tampering, fraud and embezzlement. All of which can create some serious problems that can take months or even years to resolve.
Hiring an HRO is smart because they understand security risks and utilize the right technologies to keep payroll information safe. If something looks sketchy, they will be quickly alerted and address the situation before it becomes a major threat.
With all the complexity and complications involved with payroll processing, hiring an HRO can be a big help for your business. Not only does it ensure accurate reporting, but it can also save you time and money and protect financial information.