Outsourcing Payroll services
Introduction
A lot of employers prefer to outsource part of their obligations such as tax duties for payroll to companies that provide such service. This refers to an organisation hires third party companies to deal with payroll and finance operations on their behalf with an aim of saving valuable time and funds that would be required for the operations. Among the important decisions that a company can make is to outsource their payroll after taking into consideration the various advantages or disadvantages of this outsourcing. The organisation have to comply with and ensure that payment for local, state and federal taxes are made correctly and on time (Bieg and Toland 2016).
Advantages and Disadvantages
Outsourcing of payroll services help a company save time since payroll processing is a time demanding task. It enables a firm to free up time that would have been used by staff so that to concentrate on activities that add more value and income. Another advantage is cost saving especially for small business. It may cost more for the business to have the employees carryout payroll related activities in terms of time as compared to the payments made for services offered by various providers of payroll services. It also saves money used for tasks such as printing and distribution of checks and preparing tax documents. Similarly service providers are equipped well than a small firm to handle the complicated federal, state or local payroll taxes consistently and accurately. This will help the firm in avoiding IRS Penalties since the providers of payroll services bear the responsibilities if penalties are incurred (Bragg, 2004).The cost saving thus justifies payroll outsourcing.
The decision to outsource payroll service could be determined by how much of control a firm need to have. The outsourcing means hand over to third parties the operations thus giving the company less control over their confidential data and financial information. The company may find it hard to access their information which are stored in the server of the payroll firm. A payroll company’s failure to guard such information makes it susceptible to employee lawsuits or theft. If a company has other confidential information that will have to be handed over to service provider such as payroll and medical records, there is a risk of confidentiality being compromised. The same may apply where the function to be applied includes sharing of a firm’s proprietary knowledge or data like formulas. In addition, business may find themselves paying for other services that they don’t need that are offered by payroll companies as all-inclusive packages, thereby raising payroll outsourcing cost. There is also a possibility of encountering inconsistencies on work quality more so where there is frequent change of service providers (Bragg, 2004).
Payroll services providing companies.
Intuit Inc.
This is an American company that develops software for tax and financial preparation and such services to individuals, small business and accountants. Intuit develops financial and tax software that are designed for the above mention consumers. I recommend outsourcing of the company’s services since it is among the best payroll providers and it has an outstanding reputation. The online services for intuit are software based, but included in their offer is a full set of applications that come with software that can assist in recruiting needs. A plan can be selected where intuit does the preparation and sending of a firm’s taxes or prepares them and the outsourcing firm sends them. This company charges very low monthly charges making the service convenient and accessible to many business both large and small. Quick Payroll is the software used for in house payroll processing, where tax tables updates and update of software are accessible online on the basis of yearly subscription (Professional Employer.net, 2013).
ADP
It is the leading in payroll outsourcing globally. It is very useful in dealing with various payroll challenges relating to compliance with labour low and time or any issues regarding integration of technology. The system has very strong reputation considering that it has been dealing with issues concerning payroll system for more than 60 years. Its payroll software combines usability, flexibility and it is cloud-based with support from a global team of dedicated experts who are highly trained. ADP Enhanced Payroll offers various solutions for payroll ADP Essential Payroll being the most basic. This payroll service operates on ADP RUN which is easy to use and fully featured online program for payroll management. It also provide thorough taxes services thus it is very recommendable (Professional Employer.net, 2013).
Paychex Flex
This company provide a helpful payroll service which streamlines the whole process to a few steps that are quite simple. It offer services for both small and large. The outsourcing firm can enter payroll for individual or several employees or utilise the automatic feature creation to have a quick review of the payroll before submitting it. It allows for entry and submission of payroll through a personal account. Moreover, Paychex handles all the issues relating to compliance on payroll tax, and there are no costly errors since it backs up its services (Professional Employer.net, 2013).
References
Bieg, B., Toland J. (2016). Payroll Accounting. Cengage Learning. 23-25
Bragg, S. M. (2004). Accounting for payroll: A comprehensive guide. Hoboken, N.J: J. Wiley & Sons.
Professional Employer.net (2013).The Top 10 Payroll Outsourcing Companies for 2015.1. Retrieved from: http://www.professionalemployer.net/the-top-10-payroll-outsourcing-companies-for-2013/
Intuit
Company Fast Facts: Intuit Inc.
http://www.intuit.com/company/fast-facts/
ADP
Paychex.
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