subject: Why Should Smes Outsource Their Payroll? [print this page] Small and medium sized firms (SMEs) have many challenges that are naturally incurred in the day-to-day operations of a company. First of all, new firms are not expected to make a profit until they've been open for two years, and in some cases, the person who starts the firm may have to forgo earning any salary from his or her enterprise for up to five years.
This being said, the idea of taking on an expense such as outsourcing payroll may seem ludicrous, but the truth is that it may be the best thing for the company. When a payroll expert handles this task it can save time and money.
If anyone is going to do payroll in house it should be an accountant. However, unless the firm in question specializes in auditing or personal tax returns, it is unlikely that an accountant would be necessary for most of the needs that he or she can fulfil. For this reason, using a payroll service would be much cheaper than having an accountant on staff.
With no accounting professional on staff, the next most qualified person is the company's owner who, more likely than not, has more important things to do like growing the business as he expands its network. In addition to this, when someone inside the firm handles payroll that is not an accountant several key factors are introduced to the complexity of the firm. To begin with, private salaries become known by an employee who may not understand the sensitive nature such matters, especially if that person worked previously in the public sector where salaries, pay raises, and bonuses are published as a matter of government transparency.
Payroll services also ease the burdens placed upon employees when there are payroll issues. When a company specializes in an area, it is usually very good at it as a system has been developed and put in place for even the newest employee to be trained up on in a relatively brief period of time.
An absence of errors leads to increases in employee efficiency because there is no concern over whether one's pay that week contains any errors. Instead, everyone knows that getting paid won't be a problem, leading to a more profitable company. A more profitable company leads to growth. Growth leads to new positions within the firm. And those new positions are likely to be filled by the great people who helped raise the firm to its new height.
