Human resource management is one of the most important tasks of any business. It is complex and resource consuming. Outsourcing human resource management, though, will give the company the much needed time and resources to focus on the all-important operational side of the business, the revenue-generating tasks. Professional employer organizations (PEO) are the organizations to which HR tasks are outsourced. Payroll outsourcing is one of the services offered by PEOs. There are quite a lot of advantages of outsourcing payroll, as is the case with all outsourced HR tasks.
Payroll processing involves maintaining records accurately, calculating payroll taxes and handing out the paycheck to employees on time. Small and medium-sized business owners realize that outsourcing payroll services is more effective and cost-efficient than doing it on their own. One of the chief advantages of outsourcing payroll is that it saves time, as a PEO consists of experts in the legal and business fields who can carry out the task more efficiently, leaving you and your staff to focus on the core tasks of your business. You can hand over complex payroll tasks such as processing payroll, distribution of paychecks, W-2s, calculating employment taxes, handling employee payroll enquiries, and more to an external organization.
Another advantage of outsourcing payroll is the money gains. You can transfer your paid employees to other profitable tasks of your business. A cost evaluation would reveal the fact that outsourcing payroll services is more beneficial, especially for small and medium sized businesses. It also helps client companies avoid legal penalties as PEOs do the paperwork correctly. PEOs calculate payroll taxes accurately and also manage monthly or quarterly employment tax reports, submitting them on time.
It’s certainly a winning partnership for either party in the company – PEO relationship.