Payroll Outsourcers

The term payroll outsourcers refers to the outsourcing, or subcontracting, of a company’s entire payroll function and its manual operations to an outsourcer or outside firm. Payroll outsourcing allows companies to reduce their fixed costs while improving service capabilities and reducing the incidence of late or incorrect tax filings.

Like all outsourcing decisions, the issue they face is measuring the savings accrued against the possible decline in service. However, this is simply not an issue with payroll outsourcing. Manual payroll processes are both time-consuming and redundant, not to mention a tremendous drain on a company’s operations and internal resources. Companies that use payroll outsources are able to dramatically reduce costs while freeing up valuable time. Outsourcers are able to assume total control of the payroll process. This is done by streamlining employee pay with direct deposit, while managing all aspects of the company’s employee compensation programs.

Perhaps the most important aspect of payroll outsourcers is that they assume total control and liability for any of those aforementioned incorrect or late tax filings. According to the IRS, almost 50% of businesses face some sort of fine for incomplete tax filings. Part of the issue with these late filings is the time needed for companies to remain up to date with the most recent tax laws and government regulations. This not only takes a tremendous amount of time, but often forces companies to spend more on payroll management training. Most outsourcing firms guarantee that any late filings will immediately be reimbursed. In addition, companies view outsourcing as a way to control the payroll process without the added burden of assigning employees to monitor and control payroll. In essence, payroll outsourcers do away with the manual payroll process and allow companies to better utilize employee resources.

By and large, when given the choice between managing payroll internally, and outsourcing payroll to an outside firm, most companies choose the latter. Payroll outsourcing firms are payroll and tax specialists. They make it their number one priority to not only manage all aspects of a company’s payroll, but also to keep their clients abreast of the most up to date payroll management practices.