There’s no doubt that employees are a company’s best asset. But employees won’t work for free and, when it comes down to paying salaries, payroll is the main player.
There are three different basic types of payroll. The manual one is the first and not many companies use it as it is very time consuming, less accurate and the penalty for payroll mistakes is extremely costly. You can also outsource your payroll to dedicated companies that will process it for you; this is by far the most expensive option, but security can be an issue. The last option is in-house payroll that is done by a specific payroll software. In this blog, we discuss 4 considerations to bear in mind when choosing to process your payroll in-house.
1. Control over the process
With an in-house payroll software, you and your team will have total control over the timings and the changes that you want to undergo. The changes will also be cheaper and easier. You will always need to double check any changes that you request to an external company if you are outsourcing it.
But the control becomes even more important when you know that you are not exposing sensitive information about your staff such as salaries, benefits, etc… and all that data stays in the in-house database.
In addition to all of this, with more and better control, you will be able to make last minute adjustments – if required – and still pay your employees on time without needing to pay for the last minute penalties that most outsourced providers enforce.
2. Time and cost savings
Your first thought might be that outsourcing your payroll will be more cost-effective as it won’t be in the way of your team’s tasks and they can focus on the work at hand. But if we look carefully, when using other companies to process your payroll, there are a lot of fees to be paid like base account fees or pay check fees or any tax-related red tape fees. Plus, don’t even think about getting reports for free!
It’s true that if you have been looking at different software to help your team process payroll in-house, it may seem like a big investment. It’s also true that the first year of purchase and implementation is a big up-front cost, but it ends up much more cost-effective in the long run and you will recover your investment in just a couple of years.
3. Complex payroll
Not all of your staff are equal and have the same contracts and hours, and are often paid in different time intervals and salaries… the bigger the company is, the more complicated the payroll is within the organisation. Generally, this will make the processing of data difficult and payroll departments are in charge of doing all the calculations before sending it to outsourced companies. It makes more sense and – as mentioned in the previous point – savea time and money if, after the calculations are complete, they process it themselves with an in-house software.
By having payroll processed within your company, you eliminate the risk of uncertainty concerning what will happen with your information when you send it and any leaks of this sensitive information.
Additionally, you will limit the access of people to that information as you will be in charge of your own guidelines for payroll data.
Taking the above points into consideration, finding the best payroll option for your company shouldn’t be taken lightly. There are many things to consider like the size of your company and team, the complexity of your payroll and all your resources. With that said, processing your payroll within your own company might save you money and a great deal of headaches.