Why Outsourcing Payroll is Good for Business
Posted on: 2 December 2015
Processing payroll is one of the necessary evils of the business world. Having a dedicated system in place is crucial in order to meet the legal obligations of the Australian Taxation Office (ATO) and ensure your employees are paid correctly and on time. While it may seem like an unnecessary expense, the benefits of outsourcing payroll far outweigh the benefits of in-house processing.
Outsourcing Saves Time
The labour costs of processing payroll often exceed outsourcing costs. Outsourcing essentially frees up time so you and your workforce can focus on value-added activities, such as revenue generation. Processing monthly payments, signing and distributing pay stubs, generating and submitting reports for the ATO and correcting errors are all responsibilities covered by your accountant when you outsource.
In addition, it takes time and money to keep up-to-date with annual changes in the Australian Taxation Office's rules and regulations. Qualified accountants have to remain completely updated with the latest government legislation at their own expense.
Outsourcing Can Prevent Penalties
Manual payroll is not an easy task, even for qualified accountants. Software errors such as using the wrong table can throw your entire payroll off balance and result in some form of penalty from the ATO. Outsourcing prevents these problems from ever becoming an issue. Most accountancy firms will provide a tax guarantee, meaning they'll take on the responsibility for penalties (and cover the costs) if they occur.
Outsourcing Can Prevent Risk
Even if you can afford to hire a full-time accountant or bookkeeper, doing so could expose your business to significant risk in the future. Imagine if you only have one employee who can process payroll. If they ever decide to leave, they'll take all of their knowledge with them. Accounting services completely eliminate this risk.
Outsourcing Can Boost Morale
There are some tasks in business that are so painstakingly boring, nobody will want the burden of undertaking them; processing payroll is one of them. An inexperienced and unenthusiastic employee assigned to process payroll will be more likely to make errors, and there's nothing more demotivating to a workforce than incorrect or late wages. As an employer it's your responsibility to make sure that this basic workers' right is adhered to.
No matter what size business you own or manage, accurate and ethical payroll processing can't be ignored. If you have any doubts, do not take the risk; hire an accountant. If there's one element of outsourcing payroll that's universal across every industry, it's that it can provide peace of mind. Contact a company like CMA Chartered Accountants to learn more.
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