Why Payroll Is One Function You Should Outsource

With the change in the way businesses operate, one major change that took place is outsourcing. Outsourcing means giving the responsibility of the tasks carried out in the business to some other organization or firm. This is done with the less important activities of the business in order to save time, money and labour.

But with time, not only less important tasks, but the tasks which are confidential or can impact the reputation of the business also got started to be outsourced. For example, customer care department or recruitment or payroll. Outsourcing the task of payroll, which is highly confidential is also now done as the firms to which outsourcing is done are registered under the applicable law and are therefore ethical and trustworthy.

Though employees are internal stakeholders, it is necessary to take care of their interest and keep them satisfied with the company as what image they behold of the company is extremely important for the latter in the long run. Employees’ positive word of mouth for their company can increase the goodwill of the latter, thereby making them the preferable choice for the prospective employees. At times, it is seen that due to other tasks, task of payroll is often delayed, thereby decreasing the goodwill of the company in the eyes of its most important internal stakeholder – employees.

Even though it is a critical function, it is one function you should start to outsource; the reason behind same can be the following advantages the company can get:

• Saves time and labour for the core activities of the business: Outsourcing payroll saves time and labour, which was earlier, consumed in computing and preparing it and these resources can now be utilized for other important activities of the business.

• Firms handling the function are proficient and use advanced methods: Firms handling the task of payroll are specialized in it so companies gain from their specialization. Also, they use the latest software to carry out this task. There are various legal compliances which companies need to follow like filling and submitting various forms related to the disbursement of salaries and payment of taxes deducted as "TDS". The outsourcing firms adhere to these compliances and complete all the formalities. They also keep an eye on the changing laws and change their procedures and formalities accordingly.

• Eliminates the chance of mistakes: Due to other tasks at hand along with payroll, the staff handling the same can make mistakes. But as the staff of the outsourcing firms has only task at hand, there is no possibility of mistake.

• Saves money: As mentioned in the above point, as the chances of mistakes are eliminated, the possibility of overpaying the employees due to any clerical or technical mistake is discarded, thereby saving money for the companies.

• No delay: At times, in big organizations due to other urgent tasks or deadline for some task, it does happen that the task of payroll is postponed, which results in a delay in the disbursement of the salary to the employees. Outsourcing it thus reduces the chance of any delay in the same.