Managing and processing your payroll is a crucial aspect for your business. However, some companies feel overwhelmed with the complexity of the payroll tasks and they don’t know what to do. In this regard, payroll outsourcing could be an excellent solution.
If you don’t have enough knowledge about how outsourcing your payroll could work, it’s important for you to understand the process. By delegating your payroll to a third-party you could boost your operations and obtain the results you expect.
In this article, you’re going to gain insights about why outsourcing is an effective option for your business. In addition, you can understand the benefits and advantages this solution can give you. Let’s observe:
- What is payroll outsourcing?
- How does payroll outsourcing work?
- When should you consider outsourcing your payroll?
- What are the best reasons to outsource payroll?
- Which payroll tasks can you outsource?
- What are the benefits of outsourcing your payroll?
- How can you select a trustworthy outsourcing partner?
- Why is Connect Resources your best option for payroll outsourcing?
What is Payroll Outsourcing?
Outsourcing is one of the best options available for businesses that are having difficulties with a specific business function. When it comes to payroll outsourcing, it refers to the process of delegating this department to a service provider.
It means that the outsourcing provider will handle all the administrative tasks and compliance functions for the client. The provider will be in charge of paying employees, calculating payments, and many more tasks.
In this regard, the client should partner with a specialists company like Connect Resources to ensure great service deliverance.
Can You Outsource your International Payroll?
It’s important to note that when you decide to outsource your domestic payroll, you can contact a PEO to help you with this matter. In fact, a PEO can offer you a comprehensive service since they can also handle all of your HR tasks.
But, when it comes to handling the payroll of a foreign location such as an expansion of your business, you have to opt for a different solution. You can also delegate your international payroll but you should do it with an international PEO known as an Employer of Record or EOR.
An EOR acts as your local entity in the foreign location, therefore ensures total compliance. It’s a great option because you won’t need a local incorporation. Thus, you can continue your operations thanks to this great service.
How Does Payroll Outsourcing Work?
Many businesses don’t opt for outsourcing because they don’t know how it works. For this reason, it’s essential to understand what to expect when you partner with a service provider.
By gaining this knowledge you can make a well-informed decision and determine if outsourcing could be the best for your business.
Are you looking for an outstanding payroll outsourcing service?
Some of the most common characteristics of payroll outsourcing are the following:
- As a client, you reach to the different service providers to get a solution
- The service provider will try to understand and analyze your needs to offer an adapted solution
- You evaluate the service providers to choose the one that can give you a better service
- Once you have chosen a provider, both parties agree on the scope of the service and enter into the contract. It’s necessary to draft a Service Level Agreement so both can ensure an excellent service.
- The service provider will handle everything related with your payroll and you can start focusing on your core business activities.
When Should You Consider Outsourcing Your Payroll?
Perhaps you have considered payroll outsourcing as an option for your business. However, you’re not sure about when you should enter into the business relationship. If you’re a small or mid-size business you may feel like outsourcing is not for you. But you should know that it’s a perfect solution for all kinds of corporations.
When it comes to knowing when to outsource, it depends on several factors. For this reason, you should evaluate your current situation to determine if it could be a perfect solution.
Some of the aspects you have to assess are the following:
Complexity of the Law
If you have been struggling to ensure compliance with laws regarding employment and withholding, then it’s time to outsource payroll.
As a business, it’s important to comply with the regulations so you don’t incur in any liabilities. Thus, outsourcing is a great solution when you don’t have the capability to handle the legal aspect.
Keep in mind that if you lack compliance, your reputation gets affected. It damages your company’s image and your clients, employees and authorities won’t see you as a trustworthy business.
Time and Cost of Setting up an in-house Payroll
Setting up an in-house payroll department is costly and time-consuming. For this reason, if you don’t have enough resources to implement it, it’s best to opt for outsourcing.
Here we have some of the most common expenses related with an in-house payroll department:
- Technology and software to make the payments and calculations
- Hire experts and specialists to handle the tasks
- Hire legal experts to ensure compliance
- Set up an office space for the payroll department
A great time to outsource your payroll is when you’re planning an expansion. Administering an international payroll is a complex process and setting up a local entity to do this could be costly. For this reason, outsourcing it’s a great option since you can get a cost-effective solution.
What are the Best Reasons to Outsource Payroll?
Once you know when it’s the right time to outsource your payroll, it’s important to be aware of the best reasons to do it.
Although you may think that running an in-house payroll can be a solution, in fact it could be a challenge. Whether you’re a small or large corporation, if you don’t have an outstanding HR and accounting professionals you won’t be able to carry out the business functions effectively.
Therefore, if you want to avoid having to deal with hiring additional employees and investing so much time and effort in your payroll, you have to choose payroll outsourcing.
Some of the best reasons to opt for this solution are the following:
- Save costs: as we have mentioned before, outsourcing helps you save expenses in several areas, since you will be paying for a comprehensive solution. Therefore, you just have to make the payment to the service provider.
- Save time: with outsourcing, your HR workers can have more time to focus on other business activities.
- Smooth ongoing administration: since a third-party will handle your payroll, you can be sure there will be an excellent management in each area.
- Avoid mistakes and penalties: with a service provider that ensures an outstanding service you won’t have to worry about mistakes, issues and penalties.
- No need of a legal entity in a foreign country: it’s a great solution for your expansion. You won’t need to establish a legal entity since the service provider can be your EOR.
Which Payroll Tasks Can you Outsource?
Depending on their needs, each company is able to request a customized payroll outsourcing service. Therefore, as a client, you could get assistance in the tasks where you lack expertise.
For this reason, there are many payroll functions that you could outsource. Keep in mind that your service provider should be able to give you a solution that fits your particular needs.
Some of the typically outsourced tasks are the following:
- Running payroll smoothly for each pay period
- Making calculations and paying employees
- Calculating withholding and deductions
- Issuing paychecks or making deposits directly to your employees
- Calculate and file payroll taxes
- Filing and making payroll reports
- Employees’ benefits administration
As you can see, payroll involves handling several tasks. Nevertheless, it’s important to assess your current payroll process so you can determine in which areas you need assistance. By doing this you ensure you get an outstanding service.
What are the Benefits of Outsourcing Your Payroll?
Since there are many reasons for opting for payroll outsourcing, it’s logical to expect several advantages and benefits.
Some of the most notable benefits you can get with outsourcing are the following:
- Cost-effective solution since you won’t have to spend on hiring experts and purchasing software
- Save time since you won’t have to handle complex payroll tasks. Your HR employees can focus on other core business activities
- Ensure compliance with calculations and taxes therefore avoid issues
- Have an outstanding management of your payroll in a foreign market
- Have a local valuable partner for your business that helps you understand local payroll rules
- Relieve your company from administrative burden related with day-to-day payroll routines and pay periods
- Having access to specialists that can handle your payroll effectively
- Get assistance with employment law to have better compensation packages
If you opt for a comprehensive solution where the service provider like an EOR that manages also your responsibilities of all formal employment tasks, not only payroll, you can get even more benefits.
Are there any Disadvantages of Delegating your Payroll?
As with any other business relationship, there could be some disadvantages with outsourcing your payroll. However, it all depends on the service provider you choose.
Some businesses report that they lose control over compensation, employee data, security, timely reporting and service quality when they choose an outsourcing partner. But, you should know that all of these advantages can disappear if you choose wisely your service provider.
For this reason, it’s important to evaluate the several outsourcing agencies, so you can select the best one available. With Connect Resources you can be sure that you won’t see any disadvantage in your service.
How Can You Select a Trustworthy Outsourcing Partner?
Since obtaining all of the benefits of payroll outsourcing and avoiding the disadvantages depends on selecting the best service provider, you must focus on finding a partner that can offer you a comprehensive service.
For this reason, you should know how to evaluate an outsourcing firm to determine if it’s trustworthy. Keep in mind that selecting an outstanding partner is the first step for obtaining an excellent service, so you have to invest time in evaluating your options.
Some of the aspects you should consider are the following:
- Service offer: ask the outsourcing partner which services they offer. Make sure it offers the services you need. Also, ask about the basic and add-on services so you don’t have to fear the hidden fees.
- Security: handling your employees’ sensitive data should be done confidentially and with total security.
- Clients: make sure the service provider has experience working with enough clients so you can be sure they understand your needs. If possible, find out about the reputation they have with former clients.
- Expertise: a great service provider should have a team of specialists readily available to handle your payroll tasks. Make sure they have enough experts to handle each area of your payroll.
- Compliance: having a legal team available that keeps up-to-date with changes in regulation is a must.
Why is Connect Resources Your Best Option for Payroll Outsourcing?
If you’re looking for the best Payroll and HR Software Solution in the UAE you have to contact Connect Resources. Our comprehensive payroll service will boost your in-house system so you can ensure smooth operations.
We ensure total compliance with your payroll system so you won’t have to worry about anything. Our team of specialists is readily available to help you solve all of your inquiries. Since we have worked with outsourcing services for the past 20 years, we can guarantee we will offer you the results you expect.
Would you like to contact Connect Resources for payroll outsourcing services? You can call at +971 433 166 88 or send an email to email@example.com, and you’ll talk to one of their representatives that will gladly answer all of your questions.