The Pros and Cons of Outsourcing Payroll

Are tedious back-office tasks keeping you from focusing on the big-picture aspects of running your business? You’re not alone. This is a big reason our clients outsource administrative tasks like payroll, taxes, and more to our team at The Payment HQ.

If you're considering outsourcing your payroll but aren't sure if it's the right move for your business, you've come to the right place. Let's explore why outsourcing payroll could be a game-changer for your company.

What Does It Mean to Outsource Payroll?

Outsourcing payroll means hiring someone outside your company to provide the legal, tax, and accounting support necessary to ensure your employees receive their paychecks on time. Making that happen requires much more than just knowing an employee’s salary, cutting them a check, and entering it into the Automated Clearing House (ACH) network.

Consider the demands that are often placed on payroll teams, which include:

• Calculating, paying, and distributing paychecks at the appropriate frequency, whether daily, weekly, biweekly, or monthly
• Accounting for vacation time, bonuses, commissions, severance pay, retirement, and other payments that aren’t part of an employee’s salary
• Tallying and paying taxes
• Complying with federal regulations and data protection requirements
• Operating across cities, counties, states, and countries

What Are the Pros of Outsourcing Payroll?

Time and Cost Savings

The immediate benefit of outsourcing payroll is that you free up valuable time. Instead of getting bogged down in paperwork, you can spend your time doing what you do best—serving your customers and driving your business forward. 

While outsourcing these services will require you to spend some money on the front end, we know from experience that we will save you money in the long run (we’ll explain more below!)

Reduces Risk of Errors

We use advanced ADP systems, eliminating common bookkeeping errors that could lead to fines, penalties, and grumpy employees. And in the unlikely chance that an error leads to IRS penalties, ADP takes full responsibility for those penalties and covers the costs. You won’t get that assurance with most accountants or smaller bookkeeping firms.

Eliminates Software & Training Costs

In addition to investing in specialized software, business owners often have to shoulder the added expense of payroll training for themselves or their in-house team. When you outsource to us, those costs vanish into thin air.

You Stay Compliant

Payroll regulations change frequently, and making sure you are compliant is just another distraction that keeps you from focusing on your business. Our team of outsourced payroll specialists live and breathe bookkeeping—which means we always stay up-to-date with these changes, ensuring you remain compliant and avoid potential legal hurdles.

Real-Time Access to Important Documents

Tired of playing the waiting game with your accountant or CPA? We make digital W2s, pay stubs, and other essential reports available at all times. That means no more delays or dependence on office hours!

We Ensure You Stay Secure

Your employee data is precious. We ensure it stays secure and you remain compliant. We provide a level of security that most business owners find difficult to compete with.

We’re Always On & Always Ready

When you partner with us, you gain much more than outsourced payroll service experts—you get peace of mind. Our partnership with ADP means you gain access to certified experts who are on call 24/7. That means round-the-clock assistance from experts qualified to handle a range of payroll and HR-related challenges.

Weighing the Cons: Addressing the Common Concerns

While outsourcing payroll offers many benefits, it’s important to consider all aspects of the decision. Here are three of the most common concerns business owners have about outsourcing payroll.

Will I lose control?

Some business owners worry about losing control over the payroll process—whether because they worry they won’t be able to make last-minute changes or want to maintain oversight over sensitive financial data. While it’s true that you won’t be handling every detail yourself, we’d argue that outsourcing payroll actually gives you more control in the ways that matter most:

• You’ll have access to real-time reporting
• You can make changes quickly
• Plus, you have 24/7 support

Are there security risks I should be concerned about?

Some business owners worry about sharing sensitive employee and financial information with a third-party system. That’s understandable, but consider that ADP is a state-of-the-art system that is protected by industry-leading security protocols.

What about the added cost?

Outsourcing payroll does come with some upfront costs. However, it’s important to consider the long-term financial benefits—time saved, errors avoided, and peace of mind achieved. It’s also worth mentioning that our service is scalable, which means you only pay for what you need and use.

Take a Closer Look at Payroll Outsourcing

Whether you’re just starting your search or you’ve decided to go ahead and outsource your payroll, The Payment HQ provides many payroll and human resources strategies that can help you enhance your business. The Payment HQ can help you with your payroll and HR services needs. Save time and money so you can focus on growing your business. Contact us now!