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In this article, we explore the key areas to consider when deciding whether outsourcing payroll is the right choice for your business.
Most businesses believe that outsourcing their payroll can be costly, impersonal and remove expertise within the business, which couldn’t be further from the truth. Outsourcing offers a strategic opportunity that removes several administrative overheads, delivers business continuity for unforeseen circumstances and ensures you’re on top of compliance.
What’s more you can go beyond simply processing payroll into an all-in-one workforce management platform that includes onboarding, time & attendance, award interpretation, employee self-service and much more.
In this blog, we'll explore why a payroll company processing your payroll is a smart idea. We'll also explore the key areas to consider when deciding whether outsourcing payroll is the right choice for your business.
What is payroll outsourcing?
Payroll outsourcing refers to using a payroll company to manage your payroll processing. This means using an external payroll provider for processing employee salaries and wages; they also manage the calculation of wages, deductions, distribution of payslips, and processing of payments and legislative reporting on behalf of the employer, like Single Touch Payroll (STP).
Why outsource your payroll processing?
Many businesses will ask why outsource payroll - what are the benefits other than a third party processing our payroll to pay out people?
Outsourcing payroll benefits businesses of all sizes. It reduces payroll processing costs by freeing internal staff to focus on more value-adding activities. Payroll outsourcing also ensures your payroll is always up-to-date, compliant and in line with the latest legislation, so your organisation avoids costly penalties and fines.
The nature of outsourcing payroll means you have access to payroll professionals who offer expert advice and guidance on pay issues and help ensure the accuracy of your payroll data. Other benefits of payroll outsourcing include improved data security, less overhead in finance or human resource management, streamlined payroll processing, compliance management, and a better employee experience.
In today's world, more and more businesses are looking at workforce management software, like Access Definitiv, which offers more than payroll processing as part of payroll outsourcing services. The features of a true all-in-one workforce management solution deliver additional benefits like a single platform for all your employee data from onboarding, time and attendance, leave and accruals and a mobile app. Reporting from an all-in-one workforce management solution is very powerful for workforce optimisation and business strategy, and with a cloud-based solution, everything is delivered in real time.
The Benefits of Outsourcing Payroll Processing
Using payroll service providers helps companies cut costs associated with payroll processing and reduce compliance risks, and saves time as the outsourcing provider handles time-consuming tasks such as data entry, tax filing and other paperwork.
Outsourced payroll solutions make sense for businesses when they understand the payroll outsourcing cost and its advantages. Payroll is complex and labour-intensive; it requires qualified staff, dedicated and ample time and resources, which is often a substantial operational overhead. By outsourcing payroll, companies can free up their personnel to focus on core business activities.
Cost Savings
Companies often find that outsourcing payroll saves money in the long run; with an outsourced payroll service, a more streamlined approach to payroll is established. Additionally, with increased access to technology and cloud-based storage, online payroll systems are increasingly popular with the simple and accurate calculation of payroll information. They even offer reporting, analytics and compliance advice, which opens up a whole range of cost-saving opportunities for organisations.
Improving Efficiency
Outsourcing payroll to an experienced and established payroll service provider can enormously improve the efficiency of payroll processing. Outsourced payroll professionals are experts, use the latest payroll technology, have a proven methodology and offer additional services like payroll support, payroll audits, EOFY processing, compliance reporting, payroll health checks and additional reporting. This allows your business to take advantage of more efficient payroll output, reduce the amount of admin and overhead associated with payroll, and ensure accurate and timely employee payments. By outsourcing payroll, businesses can reduce errors, save time on manual and complex processes, and ensure compliance in real-time.
Relieve the Administrative Burden
Outsourced payroll services come with an extensive checklist of advantages. The primary benefit is the relief of the administrative load and workload, which can lead to burnout. Without the burden of in-house payroll, businesses can direct their focus back to management and other strategic operations. It saves time and money by eliminating spending on payroll software and training costs.
Outsourcing also frees up IT resources which can then be utilised for more critical projects. An external payroll service brings dedicated, knowledgeable payroll professionals into the equation who assist with tax compliance and legal requirements. Not to mention providing peace of mind knowing that your payroll information is safeguarded and their work is accurate. This way, you can concentrate on the more important aspects of running a business.
What to Consider when Outsourcing Payroll
Nature of Your Business
When businesses decide whether to outsource their payroll, one key factor to consider is the nature of their business. For most SMEs, payroll is likely to be a low priority compared to other tasks. However, larger firms with many employees may benefit from dedicating accounting resources to ensure accurate payroll records are maintained - outsourcing payroll would be a more efficient way to do this. It would also reduce additional paperwork and allow an external partner to ensure the payroll information is correct and up-to-date.
Compliance
Outsourcing your payroll can help ensure compliance with the constantly changing legislation and provide peace of mind when it comes to administering your payroll. A reputable payroll provider will become your one-stop shop for payroll compliance reporting.
Costs
You may wonder how much payroll outsourcing costs and how to calculate the cost savings. The investment depends on the type of business you run and what services you need from your payroll outsourcing partner.
Long-term, outsourced payroll can reduce costs. In-house payroll departments can be expensive to maintain, requiring staff, software, hardware, and regular training for compliance and reporting. Payroll outsourcing allows you to use the latest technology and expertise at a fraction of the cost.
Advantages and Disadvantages of Outsourcing Payroll in Australia
Growing Popularity in Australia
Outsourcing payroll processing has become increasingly popular in Australia. Businesses of all sizes are jumping on board for a number of reasons. A variety of factors drive this growing trend.
Read the pros and cons of outsourcing payroll in our article before you jump onboard.
What are the advantages?
Many small businesses do not have the resources to manage their payroll in-house and can benefit hugely from outsourcing payroll to a professional service provider. Larger enterprises can save time and money by outsourcing payroll as their payroll may be complex with time-consuming administrative tasks. Most companies outsource payroll, which is a cost-efficient way to manage payroll operations and keep employees happy. With a reliable and experienced payroll outsourcing provider handling payroll, tasks are completed more efficiently, and businesses are reassured that their payroll is in the hands of a reliable and experienced provider.
What are the disadvantages?
There are some disadvantages to outsourcing payroll to a service provider. For some businesses, it can be costly, dependent on the size, pay cycle, and complexity of payroll and people management. Outsourcing payroll services often charge a set fee for additional pay runs, manual calculations, data entry and other processing. Additionally, depending on the payroll provider and the software they use to process payroll, there could be delays in receiving and processing payroll information. It's important to ensure you engage with a provider in your time zone, as this is often an issue. Finally, managers and supervisors could face difficulty when dealing with third-party payroll providers, as they may lack the same level of local payroll proficiency as the in-house system.
A Different Outsourced Payroll Solution from The Access Group
There are many payroll outsourcing services Australia-wide. The one that suits your business is the one that solves your payroll problems.
Payroll outsourcing has been the focus of Access Payroll Outsourcing for over 20 years. Located in Australia, our team are experienced professionals who process payroll for companies of all sizes, industries, ranging from 100 employees to 25,000.
Outsourcing payroll processing is a great way to ensure your payroll is managed without any mistakes or delays. Whether you’re a small, medium, or large company, outsourcing payroll can provide some real benefits.
8 reasons why you should outsource your payroll processing to The Access Group
- Expertise – Our team of experts are knowledgeable and ensures your payroll is managed accurately and efficiently, eliminating errors and saving you time and money.
- Time – Save time and free up your team to focus on more important aspects of your business.
- Financial Savings – As specialists, we handle all aspects of payroll so you can save on labour costs, consultancy and potential errors.
- Reporting – As your payroll provider, we deliver detailed, up-to-date reports in real-time on the status of employee payroll and any other payroll-related matters.
- Compliance – By outsourcing payroll processing to The Access Group, we ensure you comply with the ever-changing compliance reporting and legislation and award interpretation and avoid costly penalties.
- Flexibility – We offer a flexible outsourced payroll solution that can be tailored to fit your payroll processes and the changing needs of your business.
- Security – Using the latest cloud-based technology for payroll management, we offer role-based access in line with the latest industry-standard security protocols to ensure your payroll and workforce management data is secure and safe at all times.
- Workforce Management - more than payroll - The Access Group uses a comprehensive workforce management solution for payroll outsourcing services - Access Definitiv. Workforce management manages the entire employee lifecycle, including onboarding, rosters and schedules, time and attendance tracking and payroll. When you partner with The Access Group for Payroll Outsourcing Services, you get much more than payroll processing, onboarding and a mobile app for employee experience on the go. Learn about Workforce Management - What it is and why you need it.
How to get in touch
Before you start your journey of outsourcing your payroll processing, talk to a specialist today
