Edu BlogSeptember 28, 2022

Payroll bureau service saves time and money

How a payroll bureau service can save you time and money

Anyone responsible for managing a company’s payroll knows that it is a complex, time-consuming task that is often fraught with problems. This is because a badly managed payroll can cost the organisation a small fortune in fines and penalties, not to mention how disgruntled the employees will become if they are not paid accurately and on time each month.

Indeed, according to the Small Business Trends: 2020 survey, 11 per cent of small business owners consider payroll and other administrative work to be a top challenge.

For a small business of between 40 and 50 employees a payroll professional could spend as much as 20 per cent of their time processing the payroll. For a larger business of, say 200 employees or more, it becomes a full-time job for one or probably even more people.

Add to this the time spent on correcting errors, staying up to date with changes in tax and compliance legislation, as well as changes in benefits administration, and the business requires even more people working full time on all of those payroll tasks.

As a business owner, can you afford to spend so much time focusing on payroll? Wouldn’t you rather spend it growing your business? If your answer is yes, then you need the services of a payroll bureau.

When should you enlist the services of a payroll bureau?

Outsourcing your company’s payroll to a payroll bureau not only helps to improve productivity in your organisation, but also ensures that you remain compliant with all the relevant regulations and legislation.

Allowing a payroll bureau to manage your payroll frees your employees to focus on more important tasks that generate revenue and help grow the business.

You should seriously consider outsourcing your payroll to a payroll bureau if your company does not have adequate resources to manage the payroll in-house and lacks the expertise to keep up with  frequently changing tax rules and regulations.

It is commonly believed that only small businesses should employ the services of a payroll bureau, but the reality is that the size of your business does not determine whether you will benefit from outsourced payroll services. A payroll bureau can add significant value to an organisation that only employs one employee by streamlining and automating processes and helping to relieve the administrative burden associated with payroll.

Larger companies, especially those with an international footprint that do not have payroll management experts in each country of operation, will also find a payroll bureau invaluable when it comes to ensuring compliance with each country’s tax laws.

Enlisting the services of a payroll bureau will save you time

There’s a lot to do when it comes to processing payroll and it involves much more than simply making salary payments.

All relevant employee information must be gathered and regularly checked to ensure it is accurate and up to date. Any overtime pay or bonuses due, deductions for medical aid, provident/pension fund, unemployment insurance fund contributions and personal tax must all be factored in to each employee’s salary calculation. Only then can all the salaries be processed, payslips distributed and payments made.

Additionally, be prepared to receive queries from some employees about how their salary was calculated. This can take time to resolve, especially if errors are detected.

When all this is considered, it’s not surprising that 13 per cent of small business owners surveyed in the Small Business Trends survey name time as one of their biggest challenges.

Rather than having to supervise an employee performing this function, outsourcing to a payroll bureau will enable them to use their time more productively and cost-effectively, focussing on activities that help grow the business, such as product development, customer services, and sales and marketing.

A payroll bureau will save your money

Payroll bureaus charge for their services, but when these fees are compared to the cost of the penalties and fines that can be incurred from errors or failing to comply with legislation, businesses are more likely to save money by outsourcing their payroll. 

In fact, studies show that companies can save an average of 18 per cent more by outsourcing their payroll compared to those who manage it in-house.

Additionally, partnering with a payroll bureau gives you more flexibility when it comes to the level of service required. Your payroll and compliance requirements will increase as your business evolves and a payroll bureau can adapt and customise its services as your business needs change.

A payroll bureau utilises the latest technology
Despite operating in the 21st century, where technology has become fundamental to daily living – both in our personal and business lives – some companies are simply not up to date with the latest tech offerings, for various reasons.

This is where a payroll bureau can prove invaluable. Through their services, business owners can rest assured that not only will their company have access to the latest payroll software platform, but also that their data is secure and not at risk of being compromised during the payroll process.

Additionally, payroll data contains sensitive employee information which must be protected in accordance with the Protection of Personal Information Act. A payroll bureau understands the importance of data security and can manage and process your sensitive information securely.

There are many other reasons why you should hire a payroll bureau. Click here to read more about these.

The bottom line

When all is said and done, whether or not you choose to outsource your payroll depends on what is most efficient and cost-effective for your business. Once you’ve made the decision to go the outsourcing route, you will need to partner with a provider that understands your business needs and can provide the peace of mind that your payroll is in good hands.

For more information on the most important qualities to consider when choosing an outsourced payroll services provider, read this article.

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