None of us would deny the fact that the salary that our bank accounts are credited with at the end of every busy month feels like the bliss of heaven. After having drained out all your energy, working day in and out, monthly pays does act as a major motivation to keep you driving with new vigor for the succeeding month. This is the reason why payroll is an indispensable aspect for consideration by businesses, irrespective of their sizes.
What makes Payroll the most complicated process?
The accuracy in the net pay received by the employees comes along with plenty of systematic and diligent handling of processes in the back-end. Processing payroll is much more than just calculating hours of work and disbursing pays. It entails a series of activities starting with designing a personal pay policy for the company (leave policy, attendance policy, benefits policy, etc), then collecting inputs from the various other departments of your business encompassing details of salary structure, criteria for benefits, deduction in case of liabilities, attendance details, income tax deduction facilities, transport charges, cafeteria charges, etc, verifying particulars to ensure alignment with pre-established formats, calculating salaries adhering to the statutory
But what adds to the complexities, is the abrupt nature of the laws and regulations and it’s vitality for consideration when processing payroll. The payroll managers need to stay on high alert, so as to not miss out on any such compliance norms, failing which might end the company in the vicious cycle of legal ramifications.
deductions like EPF, ESI, TDS, maintaining account books and then disbursing salaries followed with the mailing of payslips to each individual employee and finally sending reports related to the employee costs to the finance department or the top management for further analysis on the company finances.
What is Payroll Outsourcing?
Payroll Outsourcing means subscribing to a third-party payroll service provider for acquiring assistance related to payroll operations of your business instead of having your own in-house payroll department, which comes with it its own kind of drawbacks. The Payroll service provider is reckoned to be the maestro’s in the domain and you can be reassured of finest of assistance throughout your subscription period.
The payroll services could be anything between maintaining the employee database, deriving the net pay by deducting the gross deductions(regular deductions, statutory deductions and one-time deductions) from the gross income(regular income, qualified allowances and one-time benefits), distributing salaries, generating pay slips and producing detailed reports to the concerned authorities for analysis. One can also be proffered custom-made services according to the needs highlighted to the vendor.
WHY Payroll Outsourcing in 2020?
Payroll outsourcing brings in a good deal of perks to the organization. Working out payroll processing is a time-consuming errand and when outsourced, HR managers which are usually swamped with a lot of administrative tasks can break free from the monotony of these repetitive yet salient tasks and make room for the other core functions of a business.
It can actually help you make an escape from the compliance nightmares, which are inevitable when you or your team are not seasoned tax consultants. A single omission or a minor
miscalculation during payroll processing might lead to a terrible blunder and flood the manager’s table with heaps of fines and penalty bills.
Payroll data are highly confidential which is why it must be handled with the utmost care. When outsourcing your payroll services, you can think of it as a safe haven, for all your private database will be stored in the cloud with provisions of authority to limited personnel only. Therefore, you remain insulated against any kind of data breaches, payroll frauds, embezzlements, identity theft, and so on.
Payroll outsourcing can also be beneficial in cutting down on extraneous pays, promptness in addressing employee pay issues or queries and transparency in pay policies, but as we continue to move forward into the era of digitization, outsourcing payroll has gained much hype because of its innovative approaches towards easing the payroll hassles for its customers. AI-powered payroll solutions requiring minimal human intervention, the cloud-based management system, which can be accessed anytime from anywhere, e-portals for employee self-service, auto-synching various monitoring software or mobile applications to track an employee’s day-long activities, etc. are some of the new-age services.
HOW do you choose the best Payroll Outsourcing provider?
As the markets, today are overbrimmed with payroll service providers, it is very important for you to sort the wisest of all and hand-pick the one well-suited to your needs. Few of the criteria that are noteworthy during such selections are:
- Look for the professional licenses, qualifications, and experience that the firm posses. Examine the previous track records of service that they had been delivering so
- What will be the turn-around time, in case of any queries? Are they flexible with their procedures if the business continues to expand in multiple locations? Do they provide complimentary service offers as well?
- Are they open to embracing new technologies along with the trend?
- Are they adopting the highest level of security protocols? Are they certified?
- How much do they charge? If it’s in line with standard market rate? Are they filing taxes for you, and in case of wrong filings, are they assuming the penalties themselves.
With the major dip in the economy in 2020, rising cost reduction needs, better employee satisfaction, heightened competition, better compliance needs, and risk-free payroll management are the reasons for which payroll outsourcing continues to be a preferable alternative for SMB’s and is expected to keep burgeoning in the years to come.