Growing an SME is an extremely tricky task. There are so many processes and regulations to keep on top of, so you can be forgiven for becoming a little disorganized at times. Unfortunately, the same kind of leniency isn’t given when it comes to paying your workers.
Payroll is understandably a key concern for your employees. Above all, wages are the reason people come into work, and it can get a little messy when you fall short of your employee’s expectations. Mismanaged payroll gives the impression that you don’t respect or appreciate your staff. It could even mean the difference between an employee being happy in their role or searching for work elsewhere.
So, what is there to do when your business grows out of your control? You can’t be expected to juggle everything, but your employees still expect you to keep up with your obligations to them. You could consider hiring an in-house payroll team, but choosing payroll outsourcing services could be the boon you need.
What is outsourced payroll?
In the early stages of an SME, payroll management can be a relatively simple task with a single person in charge of bookkeeping. However as the business continues to grow, a once straightforward process can turn into an overwhelming task. That’s especially when the person in charge has other responsibilities to focus on as well as managing payroll.
When it all gets a little too much, businesses can reduce the burden and stress of manual payroll management by outsourcing their payroll. Outsourced payroll (also referred to as managed payroll) is when a business uses an external company to manage their payroll. Rather than hiring a dedicated payroll team, an SME can save money and time by using a third-party to manage payroll. The payroll provider you choose can also manage PTO, taxes and employee benefits on your behalf.
6 benefits of payroll outsourcing services
Outsourcing your payroll is a sure-fire way to give your employees a great experience while freeing you up to focus on growing your business, yet that’s not all they do. There are a huge number of benefits for an SME using an outsourced payroll option, so let’s dive straight in!
Save time and money
The two most valuable things we can have are time and money. Unfortunately, there is never enough of either!
Payroll outsourcing services may seem like an expensive option, especially compared to handling payroll by yourself, but think about how much time you spend each month trying to manage payroll. Think about all the Friday nights you have wasted dredging through spreadsheets and juggling payroll software. Wouldn’t it be so much nicer to leave all that behind and focus on growing your business?
All this extra time you’re spending on payroll will ultimately cost your business. Not only are you paying your employees more for staying longer, you’re at risk of hefty financial penalties when things go wrong
Support growth
As your business grows, so will your staffing levels. This obviously means you’ll be stuck with far more work… unless you outsource your payroll!
Handing off your payroll to a team of experts can help you grow your business. Rather than panicking about making sure your employees are paid correctly, on time and if the applicable taxes are paid, you can sit back and focus on what really matters. They are also equipped to manage a large number of employees with no disruption to payroll operations.
With all this extra free time you have, thanks to outsourced payroll, you can really take your operations up a notch.
Take the pressure off
Do you have one person in charge of your payroll? Is that person you? What happens if you take some time off right around payday? Do you have a back-up? Do they know what they’re doing? Will someone else managing payroll cause problems?
If you think that is a lot of questions to consider at once, imagine what it feels like to manage payroll without any support. There are a huge number of processes and regulations involved in managing payroll. Putting all this pressure on one person can lead to burnout, which in turn causes damage to their mental health and leaves you open to risk.
Sure, you could look at bringing in some support, but hiring an extra member of staff to assist with payroll can be more costly than outsourcing your payroll.
Improve employee satisfaction
For your employees, payroll is one of—if not the—most important aspects of the business. The main incentive for any worker is the promise of financial stability. They may love the company and truly believe in what your business is trying to achieve, but without reliable pay they can quickly become apathetic and disengaged.
By using an outsourced payroll service, you can be certain that your employees will always be paid correctly and on time. Not only does this take the stress away from you and your payroll manager, it helps your employee’s to relax knowing that they have a reliable payday coming.
Adapt to changing legislation
We are currently seeing an unprecedented situation in the labor market from mass walkouts to a global labor shortage. The effects of this will undoubtedly change the way we work forever. This can be a concern for someone managing payroll, as the labor laws and regulations surrounding payroll are constantly changing already.
Canada alone has multiple labor laws and regulations can change from province to province. Minimum wage, overtime rates, even the way you need to handle pensions can be dramatically different depending on where in Canada your employee is based.
By choosing payroll outsourcing services, you can walk away from the mountain of legislation you need to read through to properly manage payroll. Payroll management specialists are the experts you need to operate and stay compliant wherever your employee is based.
Fraud prevention
Fraud is an often overlooked issue with in-house payroll management. Allowing one person or small team to manage your company’s payroll can leave you open to major issues.
Whoever is in charge of payroll has access to your company’s finances. This gives them the chance to skim a little off the top every pay cycle. While this may not be a concern for smaller businesses that are much more savvy with their money, it can be a problem as the company grows and management can’t keep up with the finances as much as they would like.
With an outsourced payroll system, the company in charge of your payroll only sees the money they need to pay your workers. Their highly trained staff are also able to notice and report any suspicious activity.
Outsourcing your payroll helps you to scale your business safely
The first thing we usually hear when talking about outsourcing payroll is how expensive it can be. As you’ve read, it can be far more costly to keep payroll management in-house.
If you want to be sure your payroll is in safe hands, but have no spare time to manage it yourself, it’s time to outsource.
With Polite Payroll, your payroll will be in the hands of the best minds Canada has to offer. We give you the peace of mind you need to help you focus on growing your business. If you’re an American looking for a simple way to pay your partners up North, there is truly no better option than us!
