Debunked: 5 Popular Misconceptions Around Payroll Outsourcing

Running payroll can be overwhelming and complex, given the number of regulations and local laws to adhere to. Removing that burden away from your in-house team can relieve your employees and your business. Companies that outsource their payroll save 18% more than those with an in-house team taking care of it. Despite the high uptake of payroll outsourcing services, some organizations are still skeptical about trusting a third-party provider to take care of their payroll.

For CPAs considering switching to an outsourced payroll provider, it is pretty natural to have some concerns especially given the number of misconceptions surrounding payroll outsourcing. From assuming it is complicated and that it is an unnecessary expense to concerns regarding its benefits and that it might pose security risks, there are numerous misconceptions around payroll outsourcing.

Payroll outsourcing can be a daunting topic, so we have outlined and debunked some of the most common misconceptions around it so you can make informed choices about your firm’s payroll strategy. It might be surprising that some of your long-held beliefs don’t quite line up. Come find out if you have been misled and prevent it from continuing to hold your firm benefit from outsourced payroll services.

Payroll Outsourcing is Risky and Not Secure

Irrespective of the size of your business, the rules & regulations and the procedures pertaining to payroll processing are similar. When you outsource your firm’s payroll to experts will take the burden away from you. But it is natural to be cautious and concerned about sharing sensitive information with a third-party provider, especially given the frequent incidents of hacked by payroll companies. In the current age of data breaches, figuring out how your payroll provider plans to protect your payroll data could leave you terrified about considering outsourcing. But the fact is that global outsourcing providers treat data security as a key priority and business standard. Data security is ensured when third-party payroll providers encrypt all data and invest heavily in technology and a robust disaster recovery system. Your payroll outsourcing partner not only understands the sensitivity of financial data but also meets and complies with all legislation pertaining to the data protection act. They also have a stringent quality check on fraud and data safety. Moreover, they will have secured setup processes and procedures to keep your data secured and be accountable for maintaining accuracy.

My Organization is Too Small or Too Large to Benefit from Payroll Outsourcing Services

If you are a small firm or a large, well-established one, you might wonder if payroll outsourcing won’t benefit your organization. Not only because outsourcing can save you a lot of money and time, but there are other benefits of payroll outsourcing you shouldn’t miss. Regardless of how big or small your organization is, you can gain all the benefits from payroll and accounting outsourcing services as they are enabled with technology, cloud-based platforms & reporting capabilities. Your payroll service provider is equipped with teams of highly skilled payroll professionals and technological capabilities that can help you automate tax filing and payments, etc. Several payroll outsourcing providers cater to businesses of all sizes. In addition, preparing your firm for scalability can get challenging when you grow, but payroll outsourcing providers offer quality services if you want to scale. Another misconception is that leaving payroll to in-house teams can be an effective and efficient solution, but that might not necessarily be the case. Thus, it isn’t the size of your business that should determine whether you take the outsourcing path but the benefits you get from it.

Payroll Outsourcing is Too Expensive

A study conducted by PwC on the hidden reality of payroll & HR administration costs found that organizations often underestimate the actual cost of payroll processing and other critical HR systems and functions. The biggest myth around payroll outsourcing is that it is expensive and that doing it in-house is cheaper. But the fact is that payroll outsourcing is cost-effective, and businesses aren’t aware of the actual cost of doing it in-house. They often assume that it is limited to the salaries of the in-house payroll processing team. Still, it includes ancillary costs, including IT support, security, payroll software, infrastructure, and other associated costs like hiring, training, etc. Running an in-house payroll system includes an upgraded payroll system and IT support to handle accounting, and it is not cheap compared to outsourcing services. Do not let this concern over cost be a barrier to yielding the enormous benefits that payroll outsourcing can bring, as it is more affordable than you think. Eliminate all the surprises and find a solution that works with your budget by asking what is and isn’t covered in their services.

Perhaps This is Not the Right Time of the Year to Make this Switch

There is a misconception that the beginning of a year is the only time that works best when switching to outsourcing. But that isn’t the case! While it could be easier to hand over your payroll in January, you can switch whenever you want. All you need to do is provide your payroll service partner with your payroll history for the current calendar year, and they will take care of it. Making the decision sooner will save you time and enable you to focus on valuable activities to help scale your firm. Thanks to real-time calculations and powerful analytics, payroll solutions from an expert service provider will accurately inform financial decision-making. Irrespective of when you make the switch, outsourced payroll services will offer enhanced control over the payroll functionality, analytics & insights alongside 24/7 secure access to the data you need.

Finding your perfect payroll partner is daunting and time-consuming.

There is a lot of concern regarding payroll outsourcing and its challenges, such as communication barriers, working with foreign talent, constantly changing employment laws and regulations to comply with, etc. Moreover, despite all the technological advancements, you might be resistant to change and perhaps even prefer to stick with your in-house team for payroll processing. All of these, in turn, make the selection process of choosing the right payroll service provider yet another challenge. Although it depends on how you approach your payroll outsourcing project, it is all about partnering with a global payroll service provider who understands your payroll needs and has the experience & capabilities to meet those needs. Just keeping a checklist of important criteria to consider can help you easily choose the right outsourcing partner which is the best fit for your firm.

WRAPPING UP

Global payroll outsourcing service providers have experience and expertise in managing payroll functions effectively. They can help you automate payroll and simplify it via their end-to-end payroll management services. Do not let the abovementioned misconceptions prevent you from taking advantage of the enormous benefits of outsourcing your payroll. From timely payroll processing, reporting, and analytics to tax fillings, expense management, data collation, investment proof verification, etc., payroll service providers can take the burden of payroll processing away from your in-house team.

Must Read: The Ultimate Guide for CPAs to Decode Payroll Outsourcing Services

At QXAS, we have a dedicated team of highly experienced payroll processing professionals who

• Can smoothly manage payroll
• Takes care of local taxes, laws & compliance,
• Guarantees data security
• Has well-equipped with a user-friendly platform &
• It offers a transparent pricing structure

WHY QXAS?

• We have highly experienced (14 + years) in delivering outsourced payroll solutions to firms across geographies & industries.
• Specialized in catering to high-volume payroll processing requests, our team of experts has processed over 1,000,000 timesheets annually.
• First-ever Indian GDPR compliant payroll outsourcing company affiliated with prestigious accountancy organizations such as ACCA
• Fully compliant: ISO 27001 for information security & ISO 9001 for quality
• Most trusted and successful Payroll outsourcing company with highly efficient, resolute, and experienced accountants