For midsized organizations, it can be unreasonable to dedicate one employee to the process (or burden an HR pro with it on top of their current responsibilities). While adding head count may seem like the right solution, it can be costly and difficult to hire in new regions. Plus, your payroll professionals may struggle to keep up with new legislation as your organization adds head count or acquires companies in new regions. Having operations in new regions may mean you’ll need to account for different currencies, time zones, and regional tax legislation. Outsourcing payroll can help minimize your IT infrastructure by reducing the number of interfaces, credentials, and security measures to maintain. A payroll outsourcing partner using a single application can help you consolidate your systems and provides a single source of truth for your data.

From time to time, you’re also likely to get notice of a court judgment (like alimony or child support) or tax levy against one of your employees. When that happens, you’ll be responsible for deducting and remitting a portion of their income to the appropriate party each pay period. It’s another little thing most small business owners would rather not deal with. In deciding whether to use an external payroll provider, you should also consider the fact that your time and mental bandwidth are finite resources.

Client company still legally responsible

Contact us to learn more or to get a bespoke quotation for your business. A CMO provider makes payments in international currencies, ensures that applicable taxes (such as Value-Added Tax or Goods & Services Tax) are processed, and streamlines the contractor invoicing process. Every business has its own needs, so don’t feel like there is any right or wrong way to do this. You just have to decide how much time you want to spend on payroll, how much money you want to spend, and how much hand-holding you need. Your goal should be to find the solution that frees you up to do your best work. Whether that means hunkering down with a calculator and a notepad or going with a payroll outsourcing solution, we hope you have the information you need to get on the right path.

• Most payroll service providers offer to schedule a call to discuss your needs and the services they provide.
• Clarify the degree and depth of service you need, go through roles and responsibilities, and finalize payment terms.
• This includes tax forms, job applications, worker information, payment amounts, benefits information, time sheets, and bank information for direct deposits.
• It is, however, necessary, and relates to a number of other crucial processes such as regulatory compliance, accounting, records keeping, tax reporting, and benefits administration.

That being said, it’s also important to ensure you have full visibility into your payroll. A high-quality payroll outsourcing service will provide you with a full suite of features for running payroll balance sheet vs profit and loss statement efficiently. Simple outsourcing options allow you to manage payroll data from a phone or desktop application, while higher-value options allow you to connect directly with professional support.

Detecting and preventing payroll fraud

Ultimately, you are handing over sensitive information and control over what is done with it. This doesn’t sit well with a lot of people, and is certainly a major consideration. Renowned investor Barbara Corcoran discusses the findings of a recent Forrester study showing the benefits that Paycom clients experienced.

A good payroll provider will spend the time necessary to explain their services, and the value they can bring to your business. Ideal payroll outsourcing partners will have rigorous contracts in place which ensure that all data is protected, errors are promptly fixed and that employment rules are followed. It is becoming increasingly common for businesses to engage independent contractors or freelancers, rather than employees, especially when operating across international borders. Payment processing for contractors can also be outsourced, much like payroll. Many new business owners, overwhelmed by mounds of paperwork, end up hiring additional staff to handle payroll and related tasks. Whether you staff up internally or hire a part-time bookkeeper on a contract basis, adding headcount can mean adding the bandwidth you need to handle payroll.

Processing payroll and taxes for remote employees

As organizations grow and scale, many processes get more complex and it’s easy to get distracted from the core business that drives your bottom line. For processes that are data-heavy, time-consuming, and manual, such as payroll, you may find it more advantageous to delegate this work to a specialized partner instead of taking it on in-house. If you do not want to outsource payroll, consider using software to process your employees’ payments and taxes. Naturally, the quality of payroll outsourcing will vary, but it’s clear many companies still see these third-party payroll managers as more effective than internal capabilities. Mistakes involving taxes or adherence to regulations can be time-consuming and costly to resolve, so there’s a strong incentive to get everything right the first time.

• Payroll administration requires specialized knowledge of applicable laws to ensure your people are paid accurately according to local rules.
• This may take the form of data punch cards, fingerprint scans, software systems, data provided by HR, or a combination.
• So it’s no surprise that payroll processing stands out as one of the most important parts of running a business.
• The following guide will help you determine if outsourcing payroll  is right for your employees and your organization.

This list isn’t exhaustive, but it should give you a decent sense of the sorts of red flags you should be looking for. Bottom line, a good external payroll company should give you more time to do what you do best while minimizing the distractions, expenses, and mistakes that can happen when you do payroll yourself. The rest of this post summarizes the basics of payroll outsourcing and why it may benefit your business. However, it’s worth investing in finding the right provider for that system. Payroll is the process of more than just giving your workers their wages on time.

Opting out of inefficient and time-consuming processes

Reduce risk and save time by relying on a partner to help manage your tax fulfillment needs, including  compliance, filing, and administration. Ceridian’s payroll outsourcing experts provide integrated garnishment administration and in-house tax services under a single contract. Business owners and managers need to ask themselves if the people they’ve hired on staff to build and operate their organization actually add value to the payroll process.