Managing employee payroll can often be time-consuming — unless another organization is contracted to do it for you. Payroll outsourcing can result in significant cost savings and access to payroll administration expertise but also introduces new issues and hazards. If you need help with bookkeeping for your business, look for business bookkeeping services in Bonita Springs immediately.
What is payroll?
Payroll is considerably more than just mailing checks. It includes a wide range of responsibilities, not all of which must be performed by the same institution. The process begins with integrating employees into a payroll system and continues through end-of-year tax obligations.
Gathering employee information, setting up automated payments and direct deposits, recording hours or timesheets, calculating wages owed, issuing pay stubs, and even garnishing earnings as mandated by court orders are all “functions” of payroll. It also covers maintaining tax-related information such as health insurance and workers’ compensation claims.
The phrase “payroll” can refer to a company’s list of workers who must be paid and the total amount owed in wages and salary. However, in the modern commercial context, payroll usually refers to paying employees or the companies in charge.
What is outsourcing?
For most of the twentieth century, businesses sought to own and control all corporate processes and assets. Economic theories of the time urged expansion in all reasonable directions to capitalize on economies of scale. This vertical integration approach permeated firms’ internal operations as well. It was not until the late 1980s that many businesses, hampered by bloated internal structures, began to see a wide strategic advantage in “hiring away” activities previously handled in-house. There was no going back once the potential cost savings of the technique became obvious.
This act of hiring away corporate functions, known as “outsourcing,” is now generally accepted as a commercial strategy, even if its ethical implications and economic, political, and cultural effects are frequently neglected. Its financial worth as a short-term cost-cutting tactic has been significantly increased by globalization, which has made access to overseas labor substantially less expensive than America’s local workforce.
Outsourcing payroll can save you time.
Payroll processing takes time and attention to detail, regardless of how many employees a company employs. This often occurs at the expense of important time that could otherwise be spent on more critical company concerns such as revenue generation or customer service. By outsourcing payroll to a reliable source, owners have more time to focus on what is essential to them.
