1. Avoid IRAS Penalties According to the IRAS, 40 percent of small businesses pay an average penalty of $845 per year for late or incorrect filings. Most national payroll services provide a tax guarantee, ensuring that there will be no penalties and taking responsibility for penalties when they do occur. In many instances, this immediately justifies the cost of outsourcing payroll.
2. Reduce Costs The direct costs of processing payroll can be greatly reduced by working with a payroll provider. Our research indicates that a small business of 10 employees will typically spend $2,600 per year in direct labor costs associated with payroll. Not forgetting the indirect cost of staff benefit and bonuses to these labor, the savings to outsource could amount to much more.
3. Alleviate Pain Payroll is a headache in the best case and a nightmare in the worst case. Business owners who outsource payroll eliminate a tiresome source of personal pain.
4. Offer Direct Deposit Providing direct deposit is difficult if a company doesn't use an outside payroll service. Increasingly, small businesses recognize that employees want direct deposit. Not having to make a trip to the bank is an important convenience for them. More importantly for business owners, direct deposit eliminates time-consuming and error-prone paper handling and the need to reconcile individual payroll checks every month.
5. Free Up Free Time Payroll processing is a time-consuming process. Outsourcing payroll can free up staff time to pursue more important value-added and revenue-generating activities.
6. Avoid Technology Headaches A constant question for the small business owner is whether they have the latest version of their payroll software and the most recent of the tax tables installed on their computer. Using the wrong tax tables can result in stiff penalties. Outsourcing payroll removes those headaches and keeps payroll running smoothly.
7. Leverage Outside Payroll Expertise Most business owners and controllers don't have time to keep up with constantly changing regulations, withholding rates, and government forms. By outsourcing payroll, a small business can take advantage of expertise that was previously available only to big companies.
8. Avoid Payroll Knowledge Walking Out the Door If your bookkeeper or controller gets a new job, they will walk out the door with their knowledge of the payroll process and how you do it. Using an outside service eliminates that business risk
9. Headcount Freeze and Budget Constriant Payroll outsourcing provides the solution of getting help without any additional headcount This is especially relevant in financial institutions and MNCs where restriction on headcount and budget is imposed by headoffice