Why is it important to outsource your payroll as an SME?

Entrepreneurs face challenges on a daily basis and have quite a lot on their plate. Worrying about payroll management should be the least of their worries if only they choose to outsource these services to professionals. 

Choosing to outsource your payroll management as a small business owner, in my experience – helps your business save time and money, not to mention the sense of security that comes with having professional payroll companies deal with your confidential data.

If you’re not already outsourcing your payroll services, here’s some bit of motivation to help you understand why outsourcing your payroll services to external professionals: 

1. Cost savings

Outsourcing your monthly payroll processing often saves you a full headcount. This resource can then help you as an entrepreneur to focus your attention on sales, customer services, or you can simply enjoy cost savings that will improve your business’ cash flow. 

Most companies outsource their payroll because of the hassle it proves to be, not realizing that by outsourcing, they are actually going to save costs in the long term and indirectly help them generate more cash flow for their businesses. 

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2. Save Time

No matter how many employees a business has, processing payroll demands a lot of time and attention to detail. Calculating payroll involves a lot of data entry, performing calculations for various taxes, and double-checking entries for costly errors. All of this takes time away from growing your business and serving your customers.

When you outsource these services, you get to take the hassle out of the administration processes. Outsourcing payroll to the experts, you (or your employees) become free to focus on your business’ core functions as I have previously highlighted. This means that you won’t have to worry if your payroll will be done during your or an employee’s vacation, illness or any kind of absence. 

3. Improved data security

There’s a fair amount of risk that comes with in-house payroll. The door is wide open for identity theft and other data security risks. Employee records can be viewed by those who handle payroll. While the software itself could be relatively secure, you may house your data on a server or network with security flaws that could leave you open to data theft.

Comparatively, outsourcing your payroll typically means your data is stored on highly-secure servers that use cutting-edge encryption technology, along with redundant data backups.

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4. Compliance with Government Regulations

By all means; don’t confuse this point. Just because you’re not an expert in the complicated realm of government tax regulations doesn’t mean you aren’t responsible for mistakes. You’re still legally responsible for any cases of misrepresentation or failure to file accurately with the law and governing parties such as SARS.

Private data regulations can be complicated, and they’re subject to change on a regular basis. Small business owners can’t be expected to stay on top of constantly changing regulations, but failures in compliance can lead to costly fees and penalties.

It’s best to trust the compliance of these regulations to a professional payroll company that devotes themselves to staying aware of current regulations and keeping you and your business updated.

5. Professional Expertise

A professional payroll company has individuals who are trained to deal with the complexities of payroll taxes and the changing regulations governing private information storage and processing. 

These individuals are trained to handle payroll calculations and comply with government tax authorities (SARS). 

Most small business owners don’t understand the importance of outsourcing for their payroll services because they assume this can only be done by larger businesses. What I can say from all these points is that outsourcing your payroll ‘saves’ a lot for your business and enables you to find time to generate more for your business. 

In the end, there should be no question about why you should outsource your payroll functions. The biggest question should be how to choose the right company to accurately manage your payroll while keeping your data safe and compliant.

Complete Payroll has the experience and know-how to process your payroll securely and efficiently. 

Contact me directly today and let’s get to saving!

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