The operations of any and every business are divided into two major categories – core functions and non-core functions. Non-core functions are those functions that don’t have anything (directly) to do with productivity or revenue generation. While core functions are those operations that directly affect your capacity to generate revenue. Now, an administrative action such as preparing monthly payrolls is strictly a non-core function, and that’s the primary reason why outsourcing the function isn’t going to affect the company’s standing anyway. But, that’s hardly the only reason why companies don’t handle payrolls on their own. Here’s more on why companies tend to outsource their payroll function.
Reduce Costs and Responsibilities
Companies that handle their own payrolls tend to overpay their employees by roughly 4% and that’s largely a result of inaccurately recording employee time and attendance. A competent payroll company can help you achieve greater accuracy with regards to employee time and attendance and save the associated costs you’re currently incurring. Then you also rid yourself of the issue of penalties that are imposed on businesses for inaccurate filing. When you enlist these responsibilities to a payroll service provider, you’re reducing the responsibilities you’re burdened with, which brings us to…
Focus on Your Core Operations
We’ve spoken about the distinction that one can make between one’s core functions and non-core functions. Now, preparing payrolls may well be repetitive work, but it sure does require attention to detail and investment of time in addition to understanding laws regarding employees on a federal and provincial level. Spending large resources on what is essentially a non-core function is not a sound business strategy. A business should instead direct its resources towards more productive functions such as generating revenue, tapping clients, and improving the quality of products and services that they deal with.
Available Access to Specialists
The complexity of employment law across the federal and provincial levels makes it seriously undesirable for businesses to handle the payroll functions on their own. A part of the reason why companies tend to outsource its payroll function to outside entities is that compliance to all these laws requires tremendous expertise on the part of the resources that are tasked with such duties. And, as you all might already know, quality resources are expensive. When a company opts to outsource its payroll function instead, they have access to specialised services and technological tools to ensure that payrolls are handled systematically and cost-efficiently.
There’s a reason so many companies prefer to outsource their payroll functions to payroll companies, it allows them to sit back and direct their efforts towards true growth and expansion. To solve your payroll predicament, we extend our payroll and financial management services for your operational needs. Contact our experts to understand how we proceed to go about your payroll functions.