How Payroll Outsourcing Services Can Help My Business Thrive

When you're running a small or medium-sized business, you often must wear many hats. In addition to all your other duties, you might be queen of the timesheets or king of the onboarding pipeline. Those extra roles can really start to add up.

You might find yourself struggling to juggle all those tasks, and it could begin to impact your bottom line. That's where payroll outsourcing services can be a lifesaver. In this article, we'll break down the types of payroll outsourcing services available, key benefits, and how they help businesses reduce administrative burden and mitigate risks.

What Is Outsourcing Payroll Services?

Outsourcing payroll services is when a business hires a third-party company to help handle payroll tasks, like processing employee pay, calculating payroll taxes, and helping to navigate pay-related rules and requirements. By working with a payroll outsourcing service provider, businesses can tap into expert knowledge while freeing up internal resources for other priorities. It’s a great way to keep payroll running smoothly and efficiently, and it can also be cost-effective.

A study by Ernst & Young found that on average, a company has an 80% payroll accuracy and each error costs companies $291 to remedy directly and indirectly. The EY study also found that about one in six companies surveyed (14%) indicated they had litigation issues related to payroll errors in the past year. These issues cost an average total of $3,200 in direct costs and 29 hours of internal time to settle.

In addition, 14% of companies also had faced regulatory or compliance
issues in the past year, the study found, and 12% were fined by the IRS or some other regulatory body for a misclassification or error. The average total cost in fines was $5,200.

The companies reported that beyond the immediate costs of litigation and compliance issues, they suffered other serious fallout, including:

• Employee furlough/terminations
• Increased employee turnover
• A drop in employee morale
• Damage to their brand and/or reputation

What to Expect from Payroll Outsourcing Services

When looking for a payroll service, consider which of these functions are most important to you and your company.

Payroll processing and administration

This involves payroll services and administration of payroll including employee wages, deductions, and payroll taxes, and making sure that payroll is processed timely. These services can also include employee record keeping and supporting compliance.

With payroll outsourcing services, you can count on a streamlined process that keeps everything running smoothly, so you don’t have to worry about the details.

Compliance with payroll tax and pay-related rules and requirements 

Payroll tax and pay-related rules and requirements can change every year. If you employ remote workers, compliance can become even more complicated with specific requirements varying from location to location.

It takes a sharp attention to detail and frequent monitoring to make sure that your business remains compliant. But not every business has the manpower to keep up, which can lead to errors, missed deadlines, and subsequent costly penalties or issues. With expert support providing best practices on these complexities, you can reduce the stress of staying on top of with the latest payroll tax and pay-related rules and requirements.

Reporting and accounting support

HR services providers may have systems that can generate detailed reports on payroll expenses, payroll tax liabilities, and other financial data, making it easier for you to track your business’s finances. They can also integrate payroll data with your accounting system, streamlining your processes for payroll tax filing and financial planning. This support helps you make informed decisions and maintain consistent records.

Scalability and different worker solutions

Is your business growing, perhaps even expanding internationally? Outsourcing services can easily scale to accommodate your changing needs, whether you’re adding more employees or entering new markets. They also offer global payroll solutions, supporting payments across different countries, currencies, and payroll tax systems. This flexibility allows your business to adapt quickly making it easier to navigate complex payroll issues on your own. 

For independent contractors, TriNet can assist with contractor payments, using cutting edge-technology to pay them through a single provider and centrally house important documentation.

Benefits of Using Payroll Outsourcing Services

When you have a lot on your plate, HR outsourcing can mean fewer headaches and more peace of mind.

Cost efficiency 

Outsourcing payroll services can help your business make the most of your in-house payroll team by freeing them up to focus on other priorities. The cost of payroll software is generally included in the payroll outsourcing services costs, so you don’t need to worry about purchasing, maintaining and updating it separately.  

Pricing depends on a number of factors, including whether you outsource just payroll services or whether you engage to get support for HR functions through a PEO (professional employer organization). Payroll outsourcing services often charge a base monthly fee plus a charge per employee per month for administrative fees.

Streamline and consistent payroll process 

One study by Alight found that over half (53%) of companies surveyed had committed payroll errors within the past five years. Working with payroll professionals can make payroll processes more streamlined and consistent information flow between the systems. These experts have the knowledge and tools to streamline the calculation of wages, deductions, and payroll taxes. 

Free your teams time from administrative and payroll tasks

Outsourcing payroll services can free up valuable time by streamlining complex administrative tasks, such as payroll tax administration and employee record keeping. The payroll cycle becomes faster and more efficient, as service providers support the processing and helping you meet deadlines. This allows your team to focus on more strategic business functions rather than getting bogged down in paperwork.

Focus on core business operations

Whether you're a business owner or manager, you've got a lot on your mind day-to-day. By outsourcing payroll services, you can dedicate more time and energy to growing the business and focusing on core operations. That might mean getting more leads into the marketing funnel, investing in product development, or streamlining your customer service. 

With payroll tasks supported by experts, you can leave the complex details to the professionals. Then, you're set to improve your overall productivity and focus on what's important to your business.

Choosing the Right Payroll Outsourcing Provider

There are a lot of options out there, but it's important to find the right fit for your company's needs.

Look for experience and expertise

Look for a provider with a proven track record and deep knowledge of payroll processing and payroll tax rules and requirement. An experienced PEO will understand the nuances of your industry and be able to support both simple and complex payroll needs efficiently.

Compliance support

Make sure the provider has expertise in relevant payroll tax rules and requirements. This will help your business navigate payroll and payroll tax compliance.

Customer support and communication

Select a provider that offers excellent customer support and clear communication. Payroll is a critical function, so having responsive, knowledgeable support can make a huge difference if issues arise or you need assistance.

Let TriNet Help Handle Payroll So You Can Handle the Rest

TriNet offers payroll outsourcing services designed to support small and medium-size businesses with this continuous, unforgiving process. From calculating wages to withholding and remitting certain payroll taxes for payroll processed in TriNet’s platform, TriNet’s platform simplifies essential functions while helping businesses navigate federal, state, and local requirements. With access to experienced HR professionals and payroll services, clients can receive timely support on payroll-related matters, helping them stay aligned with the latest rules and requirements.

TriNet’s payroll services also offer detailed reporting capabilities that make it easier for businesses to track payroll expenses and perform workforce analytics. Integration with commonly used accounting systems adds to the efficiency, helping reduce manual entry and potential errors.

TriNet's mobile app makes things convenient for employees, too. You can check information related to your pay―earnings, direct deposits, next payday, pay history, and more all from our mobile app. The app even handles time off requests and approvals and helps you stay current on expense reports. Whether your team is growing or operating across multiple states, TriNet’s scalable solutions adapt to your changing workforce needs. Contact a TriNet expert today.