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How to handle payroll processing is a question all businesses must consider. Small business owners might be able to manage payroll themselves, but it takes time and is susceptible to errors. Medium and large businesses can justify hiring a dedicated HR professional, but time, errors, and cost are still less than ideal.
The right software solution can make payroll tasks faster and easier for all size businesses.
Key Takeaways:
- Payroll outsourcing with integrated software reduces time, errors, and administrative burdens while improving accuracy and ROI.
- Outsourcing ensures tax compliance, protects data security, and provides expert support to avoid costly mistakes
- Outsourcing connects payroll with recruiting, onboarding, and benefits, enhancing productivity and data flow.
- While manual systems seem affordable initially, outsourcing saves money by reducing work hours and error-related expenses.
How should your company be processing payroll? Let’s compare in-house payroll vs. outsourcing with payroll software:
On-staff management vs custom solution
Between the ever-changing tax laws and the labor considerations,, you’re going to need a skilled employee to handle payroll in-house.
Is a dedicated employee the most efficient option for your company?
For payroll processing, outsourcing makes it easier for anyone in the office to manage this workload, thanks to payroll software.
Managing payroll takes too much time
The old-school way of crunching numbers is tedious, repetitive, and cumbersome. Correcting an error can be annoying, time-consuming, and even costly. Plus, dealing with employee questions and requests can hinder timelines.
The alternative is outsourcing the work with user-friendly software. HR software saves more time when it connects multiple systems, such as timekeeping and new employee onboarding. Employee self-service also takes much of the administrative burden off of your HR team.
Outsourced payroll solutions are easy to use
If you think payroll processing isn’t complicated, then you should learn more about the tax penalties and deadlines. Bookkeeping skills and knowledge of tax regulations are essential for anyone running payroll manually.
Payroll software can make the process significantly easier for those of us who aren’t CPA’s. Once you have everything properly set up and employee information entered, actually running payroll should only take a few clicks.
Eliminate human error
It’s easy to make mistakes when manually copying between spreadsheets and repetitive, time-consuming tasks. When custom software automatically runs payroll, however, you’ve removed the opportunities for human error. The calculated results will directly (and accurately) reflect the input information from time clocks and other linked systems.
Integration with other systems
Manual payroll is difficult to streamline and nearly impossible to fully integrate with other HR software. If you upgrade your attendance and onboarding software, the upgrades probably won’t make a big difference to the people processing payroll.
With outsourcing payroll, you can connect multiple software solutions to make them both more efficient. Netchex offers a full suite of HR technology solutions on top of payroll, including recruiting & onboarding, benefits administration, performance management, and more.
Security and trust for payroll
Data leaks frequently make the news, and ransomware attacks are only one of many security threats. When you outsource payroll, the service provider has the incentive and expertise to protect your data security.
Tax management
Do you know how to correctly classify exempt and non-exempt employees? Tax withholdings and changes to local, state, and federal tax laws all make the tax process complicated. With payroll outsourcing, you can skip the guesswork and submit taxes automatically.
Guaranteed compliance
Doing your own payroll, you’re liable for any compliance issues with taxes and other regulations. You’ve got to classify workers correctly and beware of issues like overtime laws. When you outsource, the payroll company has experts who can guarantee compliance.
Fully supported
Even if you hire someone with years of payroll processing experience, it can be hard for any individual to keep up with changes to tax law and regulations. Another advantage of outsourcing is gaining access to that wealth of payroll-specific knowledge from a service team at the ready 24/7.
Cost savings and Return on investment
Many businesses stick with their current payroll system because it works “well enough” and upgrading would be an added cost.
They often fail to appreciate the future savings that would come from outsourcing and simplifying payroll. Outsourcing reduces the work hours needed each pay period and prevents costly mistakes—greatly increasing your ROI for years to come.
Built-In reporting & analytics
Reporting is important for improving your business’s performance and efficiency.
Unfortunately, it’s not very efficient to convert manually compiled payroll data into internal reports. With outsourced software, the reporting and analytics are automatically included, providing useful data without creating yet another task.
Outsourced Payroll Management with Netchex
If you’re interested in learning more about payroll processing and other HR solutions, the team at Netchex can help you determine what software would be the best investment for your company.
Outsourcing Payroll
Anyone can run payroll
Quick and efficient
Easy and streamlined
Accurate and error-free
Full integration
Safe and secure data
Automated taxes
Guaranteed compliance
Service team of experts
Return on investment (ROI)
Built-in reporting & analytics
In-House Payroll
Requires dedicated employee
Time consuming for all
Complicated process
Subject to errors
No integration w/ HR functions
Lack of security
Tax complications
Compliance issues
Lack of expertise
Cost savings
Manual reporting
FAQs
Some of the benefits to outsourcing payroll to a dedicated solution include:
- Time Savings
- Error Reduction
- Compliance Assurance
- Cost Efficiency
- Data Security
- Integrated Systems
Payroll software automates tax calculations, tracks regulation changes, and ensures accurate employee classification to avoid penalties.
Yes, payroll outsourcing reduces administrative workload, prevents costly mistakes, and delivers long-term ROI through efficiency and accuracy.
This article is part of our comprehensive payroll management series.