In a word no. There's a
very good chance that you can save money by outsourcing your payroll operations.
Do the math. Figure out how many hours your employees are devoting to payroll-related
activities, calculate how much you're spending and compare the amount to the plans
offered by several payroll-services providers. Also, be sure to factor in the money
your business spends on payroll software and other tasks like printing and distributing
cheques, creating tax documents, and the like. You'll probably be surprised by the
Yes. It is not just about all the time it takes to do the payroll, but when it is
due to be done.
At this time all other tasks take second place. Your staff could
be working on solving a client’s problem or developing new business. Which type
of work is more valuable?
No. A good payroll-services provider is far less likely to make a serious error
than your in-house staff. An outsource provider does nothing else, they can more
easily become experts and maintain expertise than you can.
No. In-house payroll is as reliable as the people doing the work. With a payroll
service, output speed and quality won't vary in accordance with holidays and illnesses.
You also won't have to spend time helping new hires understand your business's payroll
system. You don’t pay for the “learning mistakes.”
They are faster. Since payroll-services providers are specialists with vast technical
resources at their disposal, they can process even the most complex payrolls at
A good payroll-services provider will know all the ins and outs of payroll related
tax laws and regulatory issues within your segment. They do it for more than just
one organisation. Your employees could try to achieve the same level of understanding,
would take a considerable investment in time and effort with the likelihood
of more “learning errors.”
It is certainly more secure than an in-house solution – by a considerable margin.
Loss of data
Outsourced providers are better at doing, storing and restoring backups than internal
A CEO’s worst nightmare is staff learning what each other earns. He/she knows that
they will be dealing with the fallout for weeks. A payroll outsourced service greatly
reduces this risk.
Payroll fraud is where payroll staff carry out a fraud on their own in collusion
with some staff. You take away nearly all the risk when a third party is responsible
for the processing, in this case you trust a company which has more to lose than
an individual, and it is more difficult for collusion to take place.
No. You manage the payroll provider on the outcomes of payroll, not on processes.
You will have a Service Level Agreement (SLA) that states when payroll will be done
and how problems will be resolved rather than having to examine and fix processes.
A large headache is taken away from
management to allow them to focus on what is
more important to the business.
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