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In-House Payroll Software vs. Outsourcing Payroll Services

In-House Payroll Software vs. Outsourcing Payroll Services

If your business is looking for ways to correctly handle its payroll, comparing the benefits of in-house and outsourcing services can help you make the right decision. Accuracy, compliance, and speed are all important factors for keeping costs down, improving employee satisfaction and meeting federal requirements.

Benefits of In-House Payroll Software

In-house payroll processes involve trusting current systems and employees to manage all activities related to payroll, including tracking work hours, issuing checks, and reporting taxes to state and federal governments. The benefits of using in-house payroll systems include:

  • Operating on your own schedule – meeting deadlines during your regular business hours
  • Correcting errors quickly and easily – editing or processing changes can be done instantly, rather than waiting for a third-party to correct employee errors
  • Controlling costs – paying employees rather than spending money on outsourcing can help some companies control their budget
  • Accommodating special requests – such as custom reports or one-time deductions

Due to the list of ever-changing government regulations, payroll is a complicated and time-consuming process. Depending on the size of your company, your employees may spend considerable time on payroll processes that could be better spent in other areas, such as market analysis, operational emergencies or future growth.

Benefits of Outsourcing Payroll Services

For companies that don’t have a designated payroll department, the task of processing can be outsourced to payroll professionals. Some of the main reasons that small and medium businesses outsource their payroll services include:

  • Tax compliance – professionals ensure that all payroll laws and regulations are met
  • Data security – service providers protect sensitive information from cyber-attacks with improved technology and software
  • Saving company resources – avoiding capital investment in updated technology or professionally trained staff to service payroll records
  • Employee self-service capabilities – technology providing convenience for employees to easily access their personal pay information

If you’re looking to outsource your payroll services, most providers have simple, user-friendly onboarding systems for a smooth transition. With the amount of time it can take to handle payroll tasks, many companies have found that outsourcing payroll allows for better use of human resources, it helps them avoid tax penalties, and remain compliant.

How to Choose a Payroll Service Provider

Many businesses choose to go with outsourcing their payroll for the cost savings and reduced hassle associated with providers. If you’re thinking of outsourcing your payroll services, there are a few questions you should ask before deciding what’s best for your company.

What Payroll Services Do You Need, and What Services Are Providers Offering?

While it’s important to outline what payroll services your business needs the most, your priority should be to learn about the specific services that your payroll provider can offer. If their general payroll processing or timekeeping services align with your company goals, then you can feel confident about choosing that provider.

Are There Compatibility Concerns about Your Company’s Accounting Software?

Payroll providers who are unwilling to integrate with your accounting software systems will not be able to offer the flexibility and control that you desire. Look for providers that can easily accommodate your business and attend to your customer service needs.

What Pricing Options and Fees Do Payroll Services Offer?

Good payroll providers will offer you competitive pricing and options based on your company’s specific needs and budget.

How Does the Setup and Overall Process of Your Provider Work?

The setup and overall payroll process should be simple and easy. If there’s an extensive learning curve or training involved, it might not fit your company’s goals.

Do Providers Include Tax Solutions?

In addition to regular payroll services, providers should be in complete compliance with payroll tax laws and regulations. A good payroll provider will help you avoid fines and penalties from state or federal compliance issues.

How Does Your Payroll Service Safely and Securely Handle Personal Data?

Understanding how a payroll service provider protects its customer data and sensitive financial information will help you determine how your accounting and payroll information will stay clear from potential hackers. Payroll providers should have encryption, firewall and cybersecurity software to protect your business information.

What Customer Support Services Are Offered?

Every business wants to be comfortable with the customer support that they receive. A payroll service provider will clearly outline the accessibility and availability of their support services.

Streamlining Payroll with Paypro

At Paypro, our team has over 27 years of payroll and workforce management experience. We’re dedicated to learning about your business, understanding your needs, and developing a custom solution that will save you time and money.

About The Author

Ingrid Principe

Ingrid is the Content Marketing Manager at Paypro, managing both inbound and outbound marketing initiatives for the company. She has 15+ years’ of extensive marketing communications experience, leveraging brand awareness and strategic partnerships to increase sales revenue for a diverse group of B2B brands.

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