Outsourcing Payroll Top Reasons to Outsource Your Payroll

Payroll outsourcing is the use of a third party to help handle the administration of your company’s payroll. Of course, very few business changes come without any downsides at all, and there are a couple to watch out for when considering potential payroll partners. For more information on how managed services can help you respond to economic trends and tips for choosing providers, download our guidebook. But TriNet’s bread and butter is the HR services, specifically finding, vetting and onboarding talent for their clients. And in a business ecosystem that’s as temperamental as it is now, having a trusted team to handle the hassle of bringing in new talent is an advantage indeed. There are plenty of features, functionalities and benefits that a given business might need from their payroll support vendor.

HR software pricing: 2024 industry overview

To mitigate this, it’s important to build a positive relationship and find a clear way to talk to each other. You may want to schedule regular check-ins to stay in sync, and have a dedicated point of contact in the payroll company. When a company keeps everything internal, these types of risks tend to go down. That said, most companies looking to solve their payroll woes have a number of things in common, and we’ve listed many of those core concerns here to help guide your search.

What Is Outsourcing?

However, if this isn’t the case, you may find yourself responsible for legal, financial and reputational consequences of errors that your partner has made. In an effort to accommodate for use cases like these, many providers offer access to benefits packages through their services and help you manage them just like a larger enterprise would. These days, just about any service of this level of importance comes with some kind of software platform. Keep in mind, though, that the same concerns mentioned above also apply to software capabilities. Some can handle taxes just about everywhere while others have limited range.

1. To help keep up with your growing business, you might consider outsourcing payroll to shift some responsibilities off your plate, allowing you to spend time on other crucial business tasks.
2. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
3. At the end of the day, the company is still responsible for properly compensating its employees, and problems created or left unresolved by the provider will continue to cost time and money until they’re addressed.

Reputable payroll outsourcing providers are committed to protecting sensitive data and should publicly share how they do so. Basic payroll outsourcing features range from simply processing payroll, including by direct deposits or printing checks, to more complicated tasks such as tax compliance and filing. Growing teams often forego traditional benefits like health insurance and the like because of the costs involved in paying for them at so small a scale. Even if the company does offer benefits, those have to be managed properly — preferably in tandem with payroll so there’s not a bunch of extra manual accounting labor.

Why you should choose QuickBooks to be your payroll provider

Because of this, you’ll want to do your research and weigh the pros and cons before deciding whether or not outsourcing payroll is a good idea for your business. Follow this guide to learn more about payroll outsourcing and how it can benefit your business. Paying international freelancers is more complicated than paying domestic W-2 employees, and not every provider can, well, provide that. So start by clarifying what you need in this category, then build from there. If you can’t legally pay your crew, do unearned revenues go towards revenues in income statement it’s not a solution — it’s a financial timebomb.

There’ll be no more laborious form-filling or switching between spreadsheets. Everything can be done in the app through a convenient chat interface, from setting up and adding employees to running a pay cycle. When you choose the right HR solution, outsourcing can cost of goods sold vs operating expenses what is the difference be a cost-effective option.

In some cases, a company may save time and money by having a third party handle the payroll function. In others, outsourcing payroll can reduce the number of processing errors or free up professionals to focus on other tasks. Our last list entry is a bit of a midpoint between software-only providers like OnPay and more full-service providers like the ones mentioned further up. But they also offer extensive support and administrative services to help teams minimize the amount of work required internally to keep HR functions running. However, a closer examination often reveals that investing in third-party payroll services retained earnings is actually a cost-saving strategy, which should be counted as a significant advantage.

International payroll outsourcing usually involves working with multiple third-party providers across the globe, which can present additional difficulties around compliance, currency, and communication. A company’s core business functions—whatever it does to generate revenue—are understandably its main priority. Typically, providers report to the client on a regular, predetermined basis, confirming services rendered and detailing performance.

Find out more by discovering the CloudPay approach to global payroll today. When a business delegates a portion or all of its payroll operations to a third party, it’s known as payroll outsourcing. In addition to running payroll, full-service providers typically help with tax reporting, regulatory compliance, data security and unemployment claims. They will go on to report regularly on payroll performance so that you can confirm that everything is running as it should and that you are getting value from the outsourcing agreement. Generally, they involve set monthly or annual fees, plus extras for additional services.

Finally, the client shares all relevant information the provider needs to complete the payroll functions it will assume. You have a minimal budget for business expenses and you don’t need a payroll solution packed with extra features. In this case, a payroll outsourcing partner like Payroll4Free could be exactly what you need. While the price of payroll outsourcing should be a consideration as you compare options, it shouldn’t be the sole determining factor behind your choice. If your company is larger than that, or soon will be, you’ll need to pay for the service.